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More data suggests smartphones are going to get way more expensive soon
- Market analysis shows the premium smartphone market is growing while other markets are declining.
- Premium phones grew in market share by 1% YoY.
- Smartphones will inevitably get more expensive, with more focus from brands on high-end models.
Last week, we shared a rumor related to the iPhone 15 series. The rumor suggests the Pro models in that series could be more expensive than ever, which would represent the first time Apple’s increased Pro-level pricing since the iPhone X. We posited that all premium smartphones — even the best Android phones — would see price jumps as well with Apple leading the charge.
Today, we have more data to suggest this will happen. Counterpoint Research published some stats related to the premium smartphone market in 2022. You can see the chart for yourself below, but we can summarize it pretty quickly: while overall sales of phones across the globe dropped by 12% year-over-year (YoY), phones in the premium segment actually went up by 1% YoY. For the first time ever, expensive phones captured 55% of the global market.
In other words, OEMs are selling fewer budget and mid-range phones than ever before, and phones in the $1,000 range are selling like hotcakes. It doesn’t take Batman to figure out what happens next.
Premium smartphone market analysis
If you are confused, the “(≥$600)” statement in the chart’s title refers to wholesale pricing of phones, not retail. For market analysis, Counterpoint Research uses wholesale pricing because retail pricing fluctuates too much around the world to give reliable information.
Since 20216, the premium smartphone market has only climbed or stayed flat. This proves that people are buying phones in the $1,000 range more and more each year. There are quite a few possible reasons for this. An obvious one is that the economic downturn of the past few years has disproportionally affected less affluent people and nations. In other words, affluent folks have just as much money as before, while less affluent folks have less. That would help explain why expensive phones are selling well, and cheaper phones are declining.
However, we’re seeing this increase worldwide, not just in wealthy countries like North America. Even emerging markets are seeing an uptick in the sales of expensive phones. This could be explained by folks in these categories being more inclined to upgrade to premium devices now that they are on their third or even fourth smartphones.
Regardless of the reasoning, this will affect the industry in two major ways. First, OEMs will spend more resources on developing and selling premium devices and less on mid-rangers. Second, the prices of those phones will likely increase since customers appear to be fine with spending more money to get better devices.
It might not happen this year, but you can go ahead and expect future Android flagships to go up in price. The Galaxy S24 series, for example, should get a price bump even here in the US next year. Get your wallets ready.