India emerges as fastest growing 'premium' smartphone market in 2023

The overall global smartphone market is expected to see a decline this year, but the premium market’s sales are estimated to grow 6% YoY in 2023, which is a new record, according to the latest report by global TMT (technology, media and telecom) research firm Counterpoint Research. In the premium smartphone market, Apple continues to be the undisputed leader, but compared to 2022, its share has declined in 2023, mainly due to Huawei’s resurrection in China driven by the Mate 60 series.

South Korean giant Samsung has also gained a share, driven by its S23 and Foldable series. The data shows that foldables have also emerged as a differentiator in the premium market.

In the year, countries like China, India, MEA and Latin America are likely to set a new record for premium market sales, with India being the "fastest-growing premium market globally".

In addition, the premium segment is likely to capture close to one-fourth of the global smartphone market sales and 60% of the revenues in 2023. The revenue trends show that over the past few years, the premium segment has emerged as a growth area in the otherwise weak market.

In volume growth in 2023 compared to 2016, the year 2023 could see about 24% growth in the global smartphone market's premium segment, up from 21% recorded in 2022 and 19% in 2021.

This trend also signals a shift in consumer buying patterns in the smartphone market. "Considering the importance a smartphone holds, consumers are willing to spend more to get a high-quality device that they can use for a longer period. Owning the latest and greatest flagships has also become a status symbol for many consumers, especially in emerging markets," says Varun Mishra, senior analyst, Counterpoint Research.

Within the premium market, shows the data, it is the “ultra-premium segment” that is driving the growth. The $1,000 and above price segment has captured over "one-third of the total premium market sales" in 2023.

Overall, the premium segment is expected to continue to outgrow the global smartphone market. "OEMs that can differentiate themselves and, more importantly, build a strong brand will benefit from this segment’s growth," the report says.

Apart from premium smartphones, another crucial theme that has emerged is the share of GenAI smartphones, which is expected to be 4% in 2023. With AI taking centre-stage in every sphere of life, the smartphone industry, too, is set for a "revolutionary change", and by 2027, the GenAI smartphone share could touch 40% and surpass half a billion in shipments.

In this year, too, generative AI (GenAI) smartphones could see shipments rising to over 100 million units in 2024. By 2027, the shipments of GenAI smartphones are expected to see a CAGR growth of 83%, hitting around 522 million units.

GenAI will have a profound impact on India, too. The new technology could contribute $1.2-1.5 trillion to the country's GDP by FY30, as per the latest EY India report. India has emerged as the second largest generator of digital data, behind only China, which gives the country an advantage when it comes to training GenAI models.