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Can Premium Smartphones Continue to grow in 2022 given headwinds?

by David Kerr | Mar 31, 2022

Over the last 5 years, shipments of premium smartphones priced over $600 have exploded.

In 2021, these high tier and flagship devices captured 18% of volume but a staggering 55% of revenue. Can this continue given the economic, geopolitical and consumer confidence, and lingering threat of another round of Covid 19 lockdowns?

Our latest price tier analysis for each of our 5 global regions have just been published and are available to clients here. 
 
Globally smartphone volumes and value recovered strongly in 2021 after the huge disruption of covid-19 lockdowns in 2020. Overall, smartphone wholesale revenue grew an impressive +15% in 2021 on volume recovery, the iPhone 5G supercycle, new foldable form factors led by Samsung and the start of a movement by Chinese brands to move upstream in search of profits and brand halo impacts. 

Asia Pacific remains the biggest region driven by volume shipments although ASP (under $300) trails both North America ($550) and  W. Europe ( $450) dramatically.


North America and Western Europe drive the high end and premium tier smartphone shipments.  Smartphone priced above $600 captured over 45% of units in North America in 2021 and accounted for 1 in 3 shipments in W. Europe. 

W. Europe has seen stronger competition with multiple stronger, cash rich brands including Xiaomi, Oppo, vivo, realme looking to compete for premium or at least high tier smartphones in a bid to cast of their reputation as value challenger brands. The evolution of shipments by price tier in W.  Europe is seen below. 

We expect to see shipments of $600+ smartphones slow modestly in 2022 in W. Europe as total shipments are negatively impacted by the war in Ukraine in the Central and Eastern Europe region. W. Europe shipments will pullback 2-3% in our latest view but of course could be much worse if Russia's war on Ukraine escalates. 
W Europe Smartphone price tier shipments (2)

North America will likely be relatively untouched by pullback in total demand in 2022.  The huge push from operators to upgrade customers to latest iPhone and Galaxy brands will ensure strong sales of premium tier devices unless the staggering impact of 40+ year inflation levels known as Bidenflation and global fear of world war 3, destroys the just reemerging consumer confidence.  

Assuming perhaps optimistically that a peace agreement can be secured in Ukraine and that government monetary controls can begin to tame inflation in 2023, we see potential growth for smartphones returning in both volume and value terms 2023-2027.

By 2027, premium $600+ smartphones could reach 1 in 4 shipments 

Smartphone shipment volumes, value, revenue and ASP data for five price tiers and regions are available to clients of our smartphone strategies service.  

Additional data cuts by vendor, custom price tiers and custom regions and countries are available as custom deliverables. 
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