Shipment of smartphones costing under US$200 are expected to grow from 238 million in 2013 to 758 million by 2018, driven by the low penetration of smartphones and large subscriber bases found in BRIC countries, according to ABI Research.
The low hanging fruit for low cost smartphones is to drive smartphone adoption in emerging markets where handset subsidisation and disposable income are scarce.
“Despite the low cost moniker, research has shown that the feature gap between low- and high-end smartphones is decreasing, making low cost smartphones a ‘good enough’ solution for price sensitive consumers in all markets,” said Michael Morgan, Senior Analyst of ABI Research.
Reference design solutions from Qualcomm and Mediatek are permitting regional and Chinese OEMs to deliver dual and quad core smartphone solutions at or below US$200. White label and regional tier II smartphone OEMs are increasingly squeezing device margins to win on price and capture market share from tier I smartphone offerings. Low cost OEMs, such as Alcatel, CoolPad, Huawei, and ZTE are leveraging their increased market share to build brand recognition and move up market, putting pressure on the tier I OEMs to respond.
“We are increasingly seeing low cost smartphones appear as a solution for prepaid operators in developed markets. By 2018, ABI Research believes low cost smartphones will account for 44 percent of all smartphone shipments as the market looks to capture the next billion smartphone users.,” said Jeff Orr, Senior Practice Director at ABI Research.