Premium smartphone sales hit record as rising costs reshape market: Report

Counterpoint says premium smartphones accounting for a record 29 per cent of global sales in the first half of 2026 with Apple and Samsung capturing 84 per cent of global premium smartphone market

The global smartphone market may be witnessing one of its weakest periods in years, but demand for premium smartphones is moving in the opposite direction. According to Counterpoint Research, smartphones priced at $600 and above accounted for a record 29 per cent of global smartphone sales in H1 CY2026, up from 25 per cent a year earlier.

 

The numbers appear counterintuitive. Rising memory prices have increased smartphone production costs, global shipments have slowed, and consumers are holding on to devices for longer. Yet, instead of weakening demand for expensive devices, those same pressures are accelerating premiumisation.

 

According to Counterpoint, the shift is no longer being driven only by consumer preference for flagship smartphones. It is increasingly the result of changing economics across the smartphone industry, where rising component costs are squeezing the mid-range market while premium devices remain comparatively resilient.

The middle of the market is under pressure

Counterpoint argues that the drivers behind premiumisation are beginning to change.

 

The report stated that between the first half of 2022 and the first half of 2025, premium smartphones gained share largely because consumers gradually shifted towards higher-end devices. In the first half of 2026, however, the increase was driven primarily by rising memory costs, which affected low and mid-tier smartphones more significantly than premium devices.

 

According to the report, premium smartphone makers were better able to absorb those higher component costs through stronger margins and fewer promotional discounts. At the same time, rising prices in the Android mid-range narrowed the gap with premium smartphones, particularly previous-generation flagship models, making them a more attractive upgrade option.

Apple and Samsung lead

The premiumisation trend has largely favoured Apple and Samsung. Counterpoint said the two companies together accounted for 84 per cent of global premium smartphone sales in the first half of 2026, up from 82 per cent a year earlier. Apple remained the largest player in the segment, while Samsung strengthened its position despite launching the Galaxy S26 series later than usual. OPPO recorded the fastest growth in the premium segment at 69 per cent year-on-year, driven by its Find X9 series, while Vivo grew 20 per cent.

 

The shift reflects differences in portfolio strategy as much as consumer demand.

 

Earlier this year, Business Standard reported that Apple and Samsung were better positioned to navigate the memory cost crisis because premium smartphones account for a much larger share of their business. By contrast, manufacturers with greater exposure to budget and mid-range devices have had less flexibility to absorb higher component costs, forcing them to either increase prices or accept lower margins.

That divergence is increasingly visible in market performance. As the premium segment expands, brands with established flagship portfolios are capturing a disproportionate share of value, even as overall smartphone shipments remain under pressure.

Financing is supporting the shift

Counterpoint attributes part of the premium segment's resilience to expanding financing, trade-in and buyback programmes that improve affordability without lowering retail prices. Samsung, for instance, has expanded its Galaxy Forever programme to additional markets as part of that strategy, allowing users to continuously upgrade to the latest flagship while paying a monthly instalment.

 

Smartphone makers are also extending EMI tenures as handset prices continue to rise. Samsung has introduced a 30-month no-cost EMI option for its latest foldables in India, while Apple continues to offer cashback and financing programmes across its retail channels.

Is this really premiumisation?

The latest data also raises a broader question about whether consumers are voluntarily moving towards premium smartphones or simply adapting to higher prices.

 

Earlier this year, a joint study by Trakin Tech and Techarc found that the Rs 15,000 to Rs 30,000 smartphone segment was the most affected by rising prices, while owners of ultra-premium devices were considerably less likely to postpone purchases. The study also found that buyers who had previously used EMI financing were 3.5 times more likely to finance another smartphone purchase.

 

Faisal Kawoosa, Founder and Chief Analyst at Techarc, had earlier argued that much of what appears to be premiumisation today is, in reality, "forced premiumisation". Speaking to Business Standard, he said rising component costs are pushing prices higher across segments, forcing consumers to spend more even when the overall user experience has not changed proportionately.

 

That distinction is important.

 

The record share achieved by premium smartphones does not necessarily indicate that consumers have become significantly more willing to spend. Instead, it reflects a market where rising component costs have compressed price bands, premium devices have become relatively better value, and financing has made higher prices easier to absorb.