A report compiled by ABI research, as part of a report into the Mobile Handset Go-to-market Strategies and the Next Generation Mobile Devices forecasts that low cost smartphone shipments to grow from 238 million in 2013 to 758 million by 2018, driven mainly by the low penetration of smartphones and large subscriber bases.
Though the research does also states that the “low hanging fruit” for low cost smartphones is to drive smartphone adoption in emerging markets where handset subsidization and disposable income are scarce.
Michael Morgan, senior analyst at ABI Research stated that:
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,
The report references that design solutions from Qualcomm and Mediatek are promoting and permitting regional and Chinese OEMs to deliver dual and quad core smartphone solutions at or below $200 (low end market/entry level). Furthermore the report indicates that “white label” and regional tier II smartphone OEMs are increasingly pushing and squeezing device margins to capture and ultimately become market leader and share from tier I smartphone offerings.
Low cost OEMs, such as Alcatel, CoolPad, Huawei, and ZTE are mentioned within the report as to leveraging their increased market share to build brand recognition and move up market and ultimately placing pressure on tier I OEMs to respond in defence.
Senior practice director, Jeff Orr has stated that:
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% of all smartphone shipments as the market looks to capture the next billion smartphone users
So what do you think of the report? Is the low cost market becoming dominated by companies like Hauwei, ZTE and Alcatel and can other brands like HTC, Sony and Samsung respond by counteracting their product offerings within the low cost/entry level market?