Smartphone Average Price Up 33% in Two Years... "Market Expands Despite Lower Sales"

Smartphone Shipments Expected to Drop 12% Year-on-Year
Market Expands Through Premiumization; Even Budget Models See Price Hikes
"Next Year, High-End Devices Will Account for One-Third of Shipments"

It has been observed that the global smartphone market, despite continued declines in shipment volumes, is seeing an increase in total revenue due to the expansion of high-end product lineups. The rise in average selling price (ASP) of devices is attributed to higher component costs and manufacturers ramping up their premium product lines.

Samsung Electronics' Galaxy Z Fold8 Ultra, Fold8, and Flip8.

On September 22, market research firm Omdia forecasted in its latest report that global smartphone shipments this year will reach 1.097 billion units, down 12% from the previous year. Earlier in March, Omdia had projected a 7% decrease, but has now revised the drop upward.

In contrast, Omdia expects the overall market size to expand by 12% during the same period, reaching USD 651.6 billion (approximately KRW 870 trillion). The analysis notes that, amid the economic downturn and component supply constraints, manufacturers are raising unit prices and reorganizing their portfolios to focus on high-performance products, thereby expanding the overall market share.

The key driver is the rapid premiumization trend in the global smartphone market. Omdia has set the ASP for smartphones this year at USD 594 (about KRW 800,000), a substantial 27% increase compared to last year. For next year, the figure is projected to rise about 33% from 2025 levels, to USD 624.

In the market, the share of cost-effective smartphones is contracting, with demand increasingly concentrated in ultra-premium categories. The report estimates that the proportion of devices priced under USD 200 will shrink from 40.6% in 2025 to 25.6% next year, a decline of 15 percentage points. Over the same period, the premium segment is forecast to rise from 21.1% to 28.4%. By 2027, devices costing more than USD 700 are expected to account for one-third of all global shipments.

Indeed, the 'Galaxy S26 FE' released by Samsung Electronics earlier this month debuted at a price exceeding KRW 1 million, demonstrating the diminished presence of budget lineups. The Fan Edition (FE) is a quasi-premium lineup that retains core features of the flagship S series while offering slightly reduced specifications at relatively affordable prices. Apple also increased the price of its budget iPhone 17e, launched in March this year at KRW 990,000 (256GB), to KRW 1.15 million recently.

The increasingly premium-focused market—where consumers prefer to purchase high-quality products and use them for longer—is also influenced by enhanced hardware specifications and extended software support, which lengthen device lifespans and replacement cycles. Some consumers, burdened by expensive new products, are choosing to turn to the used smartphone market instead of buying new low-spec devices.

Omdia commented, "Manufacturers are drafting their strategies to prioritize quality and profitability, even at the expense of lower shipment volumes." The report also added, "In emerging markets, the disparity between the pace of purchasing power growth and product price increases will make affordability a particularly significant issue."

This content was produced with the assistance of AI translation services.