According to Counterpoint Research’s Market Pulse Service (a monthly report on mobile phone sales), the share of China’s high-end smartphone market (wholesale price of $400 is approximately RMB 2,750 and above) edged up from 31% in the second quarter of 2021 to the third quarter of 2022. 33% in the second quarter. However, sales in the premium segment (which includes the near-premium, premium and flagship premium segments) fell by only 10% compared to the 14% year-over-year decline in the overall market. Both the high-end $600-799 (approximately RMB 4,100-5,470) and flagship high-end (approximately RMB 6,850) segments of $1,000 and above recorded growth in the second quarter of 2022.
China’s high-end smartphone market share by price segment and 2022 Q2 YoY growth
Commenting on the changes in the overall premium market, research analyst Mengmeng Zhang said: “After rebounding from the epidemic-affected trough in the second half of 2020, smartphone sales in China reached a brief peak in the first quarter of 2021, followed by a surge in 2022. The second quarter fell again and reached an all-time low in nearly a decade. Against the backdrop of a weak macro economy, with China’s high 5G penetration rate and lack of new smartphone innovations, more consumers tend to buy Shift towards high-end smartphones to avoid frequent upgrades. This trend has helped the entire premium segment to not experience a significant decline in Q2 2022. Of course, the lockdown in major Chinese cities has affected sales in the premium segment, as most of the market’s Customers come from these cities.”
Mengmeng added: “Apple outperformed in the $1,000 and above segment (approximately RMB 6,850), up 147% year-on-year, while Samsung also grew 133% year-on-year. The growth of both brands benefited from Huawei and Chinese consumption. Consumers’ purchase intentions tend to shift towards high-end mobile phones. Driven by the success of the vivo X80, vivo saw a 504% year-on-year growth in the high-end segment ($600-$799, or about RMB 4,100-5,470). In this price segment , the vivo X series perfectly combines its excellent design and performance to help the brand perform well in online channels.”
In the second quarter of 2022, the top six OEMs accounted for 95% of the entire premium market. At the same time, vivo sales increased by 91% year-on-year, replacing Huawei for the first time in China’s high-end market to occupy second place.
When evaluating vivo’s performance, senior analyst Ivan Lam said: “Apple and Huawei have been fighting for the top two positions in China’s high-end market for a long time. But now other major Chinese OEMs have begun to target the high-end market. vivo has adjusted Its product portfolio, while launching models such as the S series to cover the mid-to-high-end price segment, and pushing the X-series to support its high-end to flagship price segment, successfully jumped from fifth place last year to second place in the overall premium segment. The X80, S15 and iQOO 9 accounted for 29%, 20% and 9% of total sales in this segment, respectively. After relaunching the X-series to take over the NEX series, vivo has partnered with Zeiss and embedded its in-house developed V1+ chip to achieve Significantly enhances the X80’s superior camera experience. The X80 has been well received by dealers and consumers in second-tier cities, which were slightly less affected by the lockdown-related outbreak in the second quarter than some first-tier cities.”
In the second quarter of 2022, vivo faced fierce competition from HONOR in the high-end market of $400 and above, where HONOR’s sales and market share increased by 43% and 50%, respectively. Both brands have gained considerable share from Huawei and OPPO, which collectively lost nearly 16% of the market. Ivan added: “OPPO has been heavily affected by the epidemic such as the lockdown, especially offline sales have been severely affected this quarter.”
Commenting on the future trends of the high-end market, senior analyst Varun Mishra said: “Leading Chinese OEMs have been actively focusing on the high-end market and have formulated many specific strategies, including launching flagship phones with folding screens tailored to the habits of Chinese consumers. models, as well as collaboration models with traditional camera brands such as Leica, Zeiss, and Hasselblad. We expect further competition in this field in the future. At the same time, with the launch of its foldable screen lineup in the Chinese market, Samsung dominates the high-end segment has gained a certain share, which indicates the possibility of the recovery of this South Korean manufacturer in China.”