Low-cost smartphone shipments exceeding 185m by 2015 are being forecast.
Driven initially by operators’ brand devices - intended to boost data usage on their own networks - pricing of entry-level smartphones will come down from $150 in 2010 to $80 in 2015, due to increased competition and the availability of lower cost chipsets, according to a report from Juniper Research, 'Low Cost Handsets & Entry Level Smartphones: Analysis & Forecasts 2010-2015’.
Devices such as the Orange Boston and Vodafone’s 945 (manufactured under OEM agreements by handset vendors like Huawei) allow smartphone features like app store connectivity and an Android OS to be offered to subscribers without the high price usually associated with the smartphone, Juniper says.
Further findings include:
- Chinese and Indian handset vendors - such as Micromax - are expected to launch Android-based smartphones at competitive prices for their local markets.
- Compression and remote browsing is enabling the mobile Internet to reach low-cost handsets at price points as low as $25.
- Content strategies in developing markets are key to reduce churn for the operator and to tie in the customer to the handset brand for the vendor.
- Entry barriers into the handset market have come down, presenting opportunities for local players in growth markets such as India and China.
As a first tier of local players like ZTE and Huawei now try to extend their market reach to the US and beyond, a second tier of Indian and Chinese players are becoming increasingly important in their local handset markets. Such players, however, still do not have the sophisticated content strategies that veteran handset manufacturers like Nokia have, the report points out.