Premium smartphone sales in China fell by 10%.

Premium smartphone sales in China fell by 10%.

Premium smartphone sales in China fell by 10%.

In the second quarter of this year, premium smartphone sales in the Chinese market fell by 10 percent. However, the share of this segment in the overall smartphone market has increased to 33 percent. The share of the premium segment in the smartphone market in China was 31 percent in the same quarter last year. This information has emerged in a recent report by Counterpoint Research.

Smartphones priced above $400 in the retail market fall under the premium segment. This segment is also divided into three segments – affordable premium, premium and ultra premium. Smartphones priced between $400 and $599 fall under Affordable Premium. Smartphones priced between $600 and $799 are premium and phones priced at $1,000 and above are classified as ultra premium.

Regarding the premium segment, Counterpoint Research analyst Mengmeng Zhang said that China's smartphone market started to turn around in the second half of 2020 after handling the shock of the Covid-19 epidemic. After the highest sales in the first quarter of 2021, the second quarter of this year stood at the lowest of the decade. This led to a decline in sales in the premium segment in the second quarter of 2022. This is mainly due to the lockdown imposed in some Chinese cities. The phone purchases have reduced during the lockdown as the premium segment customers are mainly based in cities.

However, Apple's sales in the ultra-premium segment are strong despite the decline in overall smartphone sales. In China, sales of iPhones priced at $1,000 or more rose 147 percent. Samsung's sales in this segment also increased by 133 percent. Analyst Zhang believes that the top two brands have taken advantage of Chinese tech giant Huawei's declining market share and falling behind.

The report of Counterpoint Research also said that the sales of local company Vivo in the premium segment increased by 504 percent. Based on the Vivo X series, the Guangdong-based company has taken a strong position in this segment. The share of the top six smartphone companies in the premium segment is 95 percent.

Ivan Lam, a senior analyst at Counterpoint Research, said that Apple and Huawei have been fighting for the first and second place for a long time. Now other major Chinese companies including Vivo are making their presence known in this segment.

Honor is challenging Vivo in the affordable premium segment at $400 in the second quarter. Honor's unit sales and market share increased by 43 and 50 percent respectively. Honor and Vivo have taken this opportunity as the market share of Huawei and Oppo has decreased significantly.

Chinese companies are trying different strategies to strengthen their position in the premium segment. Leica has partnered with camera giants like Zeiss Hasselblad to bring affordable premium phones, including flagship foldable phones, to Chinese consumers.