Globally, the smartphone market is in turmoil. Smartphone shipments worldwide have dropped for seven consecutive quarters now, and there’s little evidence that a rebound is in sight. India, however, has been something of an anomaly. Not only has it remained a rare bright spot—the second quarter of 2019 saw record smartphone shipments—but it’s seeing growth in the unlikeliest of areas: the premium segment.

India’s premium smartphone segment—devices priced above Rs 30,000—grew 33% in the second quarter of 2019, according to smartphone market research firm Counterpoint Research. This is unusual not just because of the global smartphone or even general economic slowdown, but because India is a country that unabashedly prefers budget offerings—smartphones priced between Rs 5,000-15,000. 

Chinese company Xiaomi’s success in the country is predicated on this. Since entering India in July 2014, it has grown to control 29% of the market, boasts upwards of 80 million users, and accounts for the bulk of online smartphone sales. All of this on the back of its budget segment portfolio.

Typical premium players, meanwhile, have gone in the opposite direction. Sony, the Japanese consumer durables giant which primarily catered to the high-end segment, finally shuttered its mobile business in May this year. Korean electronics major Samsung, meanwhile, was forced to fire 1,000 employees this past July as it struggled to keep pace with the competition. Traditional premium segment king Apple, too, has had a rough time of it—its market share in the second quarter of 2018 was 1%.

But premium segment pessimism seems to be a thing of the past. In April this year, Apple slashed the price of the iPhone XR. Its volumes subsequently doubled in the second quarter of the year compared to the same period last year. Its Indian resurgence even merited a mention from Apple CEO Tim Cook. “India bounced back during the quarter. We returned to growth there. We are very happy with that,” Cook said during the company’s quarterly earnings call.

Today, the premium segment is an outlier in the Indian smartphone market—handily outpacing the overall market, which is growing in single digits. So much so that even budget specialists like Xiaomi are wading in. In July 2019, the Chinese company launched its Redmi K20. The high-end model of the K20 retails for over Rs 30,000.

Xiaomi isn’t alone. With the segment now showing promise, the floodgates have opened and the battle is set to be a free for all. Oppo and Vivo, both siblings to India’s premium smartphone leader, OnePlus, have also set their eyes on the premium segment. 

The days of OnePlus, Apple, and Samsung—who control some 85% of the premium market—only having to contend with feeble challenges from the likes of Google Pixel, Huawei and Asus may be at an end.