iPhone Set To Grab More Than Half Of Premium Smartphone Market As Apple Inc. Pulls Away From Android Makers

While global smartphone shipments are expected to slow, Apple's iPhone is poised to command a bigger share of the premium segment of the market -- phones priced at over $400. Apple's share of the premium tier is estimated to be about 45 percent right now, but by the end of 2015 it could be more than 50 percent, according to a research note from Canaccord Genuity.

Contributing to Apple’s gains is the growing number of users switching from Android to iOS, on pace to bring the iPhone’s global installed base to over 500 million users, up from 402.1 million users in 2014, Canaccord estimates. Apple is also expected to see strong sales from its existing user base, of which only 27 percent had upgraded to the iPhone 6 and 6 Plus by the end of the June quarter.

Apple’s iPhone Upgrade Program, which lets customers swap out a new iPhone every year, was cited as a potential contributor for increased upgraders. “With Apple announcing its own installment program, we believe this will also help increase the rate at which iPhone consumers upgrade their devices,” wrote Michael Walkley, managing director at Canaccord Genuity. “We believe the growing mix of consumers choosing installment plans combined with Apple’s own installment plans will positively impact replacement sales.”

In the first quarter of 2015, Apple accounted for 92 percent of the profits made by smartphone vendors, with Samsung taking 15 percent, according to Canaccord research cited by the Wall Street Journal. The total adds up to over 100 percent because all other vendors either broke even or recorded losses.

Samsung, which held 50 percent of the smartphone industry’s profits in 2012, has seen its share falter in recent years as it faces increased competition from Apple, at the high end, and from budget and mid-tier smartphone manufacturers such as Huawei, Xiaomi and Lenovo.

Overall, global smartphone shipments are expected to significantly slow to a growth of 10.4 percent, down from 27.4 percent in 2014, according to IDC.