iPhone Remains Dominant in the High-End Market: Why Apple Holds Its Ground?

iPhone Remains Dominant in the High-End Market: Why Apple Holds Its Ground?In recent years, Chinese smartphone brands have made significant strides, not only impacting the flagship phone market but also flourishing in the mid-to-low-end segment. Consumers can now find Chinese brands at every price point, driving a surge in their sales

iPhone Remains Dominant in the High-End Market: Why Apple Holds Its Ground?

In recent years, Chinese smartphone brands have made significant strides, not only impacting the flagship phone market but also flourishing in the mid-to-low-end segment. Consumers can now find Chinese brands at every price point, driving a surge in their sales. However, despite fierce competition, Apple continues to solidify its leadership in the high-end smartphone market with the global popularity of its iPhone series, particularly the Pro models. Why have Chinese brands struggled to dethrone Apple in the premium segment? This article delves into the reasons behind this phenomenon.

Data reveals that as of September, the average selling price of iPhones has reached $1018, equivalent to almost RMB 7400, setting a new historical high. This trend stems from the robust demand for premium features, particularly the need for expanded storage. Pro and ProMax models account for an impressive 47% of all iPhones sold, a significant jump from 38% in the same period last year. This growth is a key factor driving the increase in the average iPhone price.

Beyond the rising average selling price, Apple's performance in smartphone revenue is equally impressive. According to Counterpoint Research's Global Smartphone Market Monitor report for the third quarter of 2024, Apple captured a commanding 43% share of smartphone revenue, achieving record highs in third-quarter revenue, shipments, and average selling price.

As consumers demand higher quality and performance from their smartphones, the high-end smartphone market is poised for continued expansion. Global average smartphone selling prices are projected to increase at a compound annual growth rate of 3% between 2023 and 2028. Apple's strong hold on the premium flagship market presents a formidable challenge for Chinese smartphone manufacturers.

Facing Apple's dominance, Chinese brands like Huawei, OPPO, vivo, and Xiaomi have introduced several competitive high-end products in recent years. However, they still lag behind Apple in brand influence, technological accumulation, and user loyalty.

Many users still believe, "Why not choose an Apple iPhone when you're spending so much?" or "Chinese phones get slow after a year." These ingrained perceptions are one reason why Chinese brands struggle to establish a high position in the premium market. To change this, Chinese brands need to invest more effort.

It's worth noting that the high average selling price of iPhones is also influenced by some objective factors. For instance, the iPhone 16 standard and Plus versions lack high-refresh-rate features, deterring some users, which in turn drives more towards the Pro series. Additionally, many users are deeply integrated into the Apple ecosystem, making switching expensive, further enhancing iPhone's appeal in the premium segment.

Despite iPhone's continued leadership in the high-end market, Chinese smartphone manufacturers have shown remarkable progress. Counterpoint data reveals that Chinese brands such as Xiaomi, OPPO, and vivo have achieved notable success in the market. Xiaomi ranks third, with revenue growth outpacing shipment growth, primarily driven by the strong sales of the Xiaomi 14 series and other high-end devices. OPPO witnessed a decline in shipments and revenue year-on-year in the third quarter, but global sales rebounded in September. Vivo emerged as the fastest-growing brand among the top five smartphone manufacturers, securing the top spot in shipments in both China and India.

It's worth noting that the iPhone 16 series has had mixed results in different regions. Compared to the iPhone 15 series, sales have declined year-on-year in major markets like the US.

In conclusion, the high-end smartphone market is fiercely competitive. Chinese smartphone manufacturers need to continuously innovate and upgrade their products, enhance their brand image, and improve user service to stand out in the race. The future holds the potential for many players to capture consumers' hearts, and it remains to be seen who will ultimately emerge victorious.