Global Smartphone Revenue Hits Record High Despite Declining Shipments

Global smartphone revenue reached an all-time high in the second quarter, driven by an increase in average selling prices (ASP) despite a decline in shipments. As smartphone manufacturers raise prices due to soaring memory costs in the AI era, the market is rapidly shifting from a focus on volume competition to value competition.

Apple and Samsung continued their growth by expanding sales of premium products and maintaining cost competitiveness, while Chinese manufacturers, which rely heavily on mid-range products, faced the dual challenges of rising costs and declining demand.

According to market research firm Counterpoint Research, global smartphone revenue in the second quarter of this year increased by 7% year-on-year to $109 billion, setting a record for the second quarter. Although shipments decreased during the same period, the ASP rose by 17% to $400, driving revenue growth. The ASP also reached its highest level for the second quarter.

The market structure is changing rapidly. Analysts note that while expanding shipments used to be the key to growth, the focus has now shifted to increasing the share of premium products and raising prices. Ongoing memory supply shortages and rising component prices due to increased demand for AI servers have led smartphone manufacturers to reflect these cost pressures in their product pricing.

“The global smartphone market has entered a phase where value growth is the key driver rather than shipment growth,” said Silpi Jain, a senior analyst at Counterpoint Research. “As the entry-level market shrinks and cost pressures increase, manufacturers are focusing on selling premium products and expanding the share of high-capacity models.” She added that installment and trade-in programs are enhancing access to premium products in emerging markets.

Apple emerged as the biggest beneficiary, achieving a record revenue share of 49% in the second quarter. Its revenue increased by 22% year-on-year, with shipments and ASP rising by 13% and 8%, respectively.

Strong sales of the iPhone 17 series drove these results, particularly the base model and the iPhone 17 Pro Max, which exceeded expectations, maintaining a sales structure centered on premium products. Unlike competitors who significantly raised prices due to rising memory costs, Apple successfully expanded its market share while keeping prices stable for its key models.

Tarun Pathak, research director at Counterpoint Research, noted, “Apple was relatively less affected by memory supply issues and absorbed cost increases internally, maintaining its price competitiveness. Its performance was particularly strong in China, Europe, and emerging markets, and the price increases by Android manufacturers further highlighted its relative competitiveness.”

Samsung also maintained a stable growth trajectory, ranking second with a 16% revenue share. Its revenue and shipments both increased by 9%, while the ASP remained stable compared to the previous year. Strong sales of the Galaxy A series drove shipment growth, and the success of the Galaxy S26 series supported premium product performance. The company also recorded double-digit growth in the Middle East, Africa, and North America, contributing to its improved performance.

Notably, Samsung effectively absorbed the impact of rising costs due to its vertically integrated structure, which allows it to source key components like semiconductors and displays in-house. By selectively adjusting prices for certain product lines, it maintained a stable ASP while securing both shipment growth and profitability.

In contrast, Chinese manufacturers faced declining performance due to cost pressures. Xiaomi experienced the largest drop in shipments among the top five brands, with a 26% decrease in shipments and a 17% decline in revenue, although its ASP rose by 13%. However, due to its high reliance on entry-level and mid-range products, it bore the brunt of rising memory costs, and the price increases led to a drop in demand, preventing the ASP increase from offsetting the decline in shipments.

Oppo and Vivo faced similar challenges. Both companies saw their ASP rise by 9% and 13%, respectively, but their revenues fell by 10% and 11%. Vivo recorded the highest ASP increase among major players, but its significant market share in price-sensitive segments could not prevent a decline in sales. Industry observers note that both companies are focusing on restructuring their product portfolios toward premium offerings to improve profitability.

This trend is expected to continue in the second half of the year. With ongoing memory supply shortages and rising component prices likely to persist, smartphone manufacturers are expected to continue raising prices and focusing on premium strategies. As supply constraints become a more significant factor than demand in the market, the decline in smartphone shipments may widen in the coming months, and the ASP is expected to continue its upward trend.