While high-end smartphone growth is expected to slow down as more people shop for cheaper smartphones and plans, low-cost smartphone sales worldwide will skyrocket.
Cheaper smartphones with a wholesale ASP below $200, are increasingly appearing in emerging and new market where many people can't afford a smartphone or a cheap iPhone 5C either.Research from ABI Research predicts low cost smartphone shipments 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.
“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,” says senior analyst Michael Morgan.
Chips from Qualcomm and Mediatek are permitting regional and Chinese OEMs to deliver dual and quad core smartphone solutions at or below $200 without a big pereived difference in performance and features.
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.
The Chinese-produced smartphone Coolpad is now the third-biggest player in China’s smartphone market.
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.
These findings are part of ABI Research’s Mobile Handset Go-to-market Strategies and Next Generation Mobile Devices Research Services.