Consumers bought 6% more premium smartphones in 2023 than a year earlier, according to a new report published today by Counterpoint Research.

The premium smartphone category encompasses devices with a wholesale price of $600 or more. Typically, such handsets retail for north of $800. Apple’s newest iPhone 15 lineup, flagship Android smartphones and foldable devices are among the handsets that fall into this price range.

The increased demand for premium devices that Counterpoint observed in 2023 came even as the broader smartphone market experienced a sales slowdown. Last January, Gartner Inc. forecast mobile device shipments would decline 4% year-over-year to 1.39 billion units. Sales dropped by an even steeper 11% during 2022.

Premium devices with a wholesale price of at least $600 have emerged as a key source of revenue growth for the mobile industry in recent years. According to Counterpoint, such handsets’ share of overall smartphone sales tripled to 24% between 2016 and 2023. On a revenue basis, premium devices now generate 60% of the industry’s handset revenues.

Counterpoint estimates that Apple’s iPhones accounted for 71% of all premium handset sales in 2023. The prior year, that number stood at 75%. Counterpoint’s research indicates that the change was primarily driven by increased competition from Samsung Electronics Co. Ltd. and Huawei Technologies Ltd., which both increased their respective market shares in 2023.

Samsung’s share of the premium smartphone market climbed by 1% to 17% last year. In February, the company debuted a new $1,200 flagship Android smartphone with a 6.8-inch display and a customized version of Qualcomm Inc.’s fastest mobile chip. Samsung also introduced new versions of its two foldable handsets, the flip-phone-like Galaxy Z Flip and the Galaxy Fold.

Huawei, meanwhile, grew its share of the premium smartphone market from 3% to 5% in 2023. It’s believed the gain was driven partly by the company’s introduction of its new Mate 60 flagship handset. The device runs on a seven-nanometer processor and provides satellite communications features.

Going forward, foldable devices are expected to become an increasingly important part of the handset market. Such devices typically fall into the so-called ultra-premium category, which comprises handsets that sell for $1,000 or more. Counterpoint estimates that ultra-premium handsets, including both foldable devices and products with a more conventional design, currently accounted for a third of premium smartphone sales.

In a report published late last year, the research firm estimated that consumers bought about 16 million foldables during 2023. That represented about 1.3% of all smartphone sales. According to Counterpoint, foldable devices’ share of the premium smartphone market could jump to about 33% by 2027.

But challenges remain for foldables. Canalys, another market research firm, estimates that 5% to 10% of the devices in this category are returned by consumers. That decreases the probability of repeat purchases, which translates into less revenue for handset makers.

Samsung currently leads the foldable device category with a 73% share. According to recent rumors, Apple may enter the market in 2025 with a foldable iPhone. The company reportedly began developing the device in 2021.

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