Displaying items by tag: premium smartphones

Premium smartphones generate 80 percent of profit worldwide

Written on Sunday, 22 October 2017 11:51

Premium segment smartphones (US$400 wholesale price) generated almost 80 percent of the global handset profit during Q2 2017, according to Counterpoint Research. Apple dominated the premium segment where profit margins are high as most of its profits come from above US$400 models.

Counterpoint Research estimates that the latest Apple iPhone X will further increase profits for the California-based iPhone maker in the premium segment and overall to record levels. Within its individual portfolio, for Samsung, the US$400+ segment contributed almost two-thirds of the total Samsung profits.

Samsung has a mix of products across different price bands that help the brand maintain an average selling point (ASP) around the world that does not hugely vary from the regional ASP. This in-turn helps the brand move more units or revenues due to the various price differentials but not profits, Counterpoint said.

By comparison, the average selling price for iPhones in developed regions is approximately 150 percent higher as compared to the regional industry ASP whereas in developing regions it can go as high as 650 percent compared to the overall industry ASP in that region.

According to Counterpoint Research Market Monitor tracker, the global mobile handset profit pool declined 10 percent year-on-year during Q2 2017. The main reasons were an increase in the mix of cheaper iPhone models, growth of less profitable mid-tier models in prepaid markets from vendors like Xiaomi as well as sales mix shift for Samsung to mid-tier J and Grand series portfolio.

Published in Devices

Japanese electronics giant Sony Corporation says it will drop its smartphone portfolio under the ‘Premium Standard’ category which was launched in 2016 and comprised of the Xperia X and the Xperia Compact. The devices were designed by Sony to be both affordable and offer flagship specifications, but sales didn’t take off.

Sony faced some backlash after it discontinued the popular Xperia Z series of smartphones and replaced it with its Premium Standard collection. Reports suggest fans were disappointed by the fact that Sony was promoting the new collection as flagship devices but the phones lacked certain features and choice of processor compared to the popular Xperia Z lineup.

The disappointment showed in the low sales figures for Sony which eventually led the company to end their Premium Standard smartphone series. Sony first hinted that it would be axing the $500 price range smartphone series at its May 24 Japan-based Investor Relations Day event. The company now plans to focus on its flagship Xperia XZ models and its XA mid-ranged smartphone lineup to recover from the lost sales and regain market share.

In Sony’s FY 2016 sales targets and results statement, its unit sales target achievement rate of the Premium Standard smartphone models was just 31 percent outside of Japan last year. In addition, the unit sales target achievement rate of the handsets in Japan and international markets were 85 percent and 43 percent, respectively.

This highlights a disparity when compared with the Xperia XZ and Xperia X smartphones, which grossed a total of 60 percent unit sales target achievement rate outside Japan and 88 percent in the international markets. Sony will now focus on its flagship and mid-ranged devices including the Xperia XZ (flagship) and the Xperia XA1 and XA1 Ultra (mid-range).

Published in Devices