As demonstrated by mobile providers shifting their pricing schemes to attract the remaining few customers in the U.S., the high-end smartphone market is beginning to saturate. Industry watchers are now looking to the mid-range and low-cost smartphone markets as the next potential growth opportunities for smartphone manufacturers.
Analyst firm ABI Research this week predicted that the sub-$200 smartphone market is poised to take off in the next few years. The firm predicts that the low-cost smartphone market will reach 758 million shipments by 2018 - up from just 238 million shipments this year. The growth is predicted to come mostly from developing markets, such as China, Brazil, Russia, and India, where large numbers of potential subscribers have yet to acquire smartphones.
“We are increasingly seeing low cost smartphones appear as a solution for prepaid operators in developed markets,” said Jeff Orr, senior practice director at ABI. “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.”
Though these types phones will cost less than premium handsets such as Apple's iPhone and Samsung's Galaxy S lineup, ABI predicts that low-priced smartphones will come very close to offering everything higher-priced handsets do. Chinese manufacturers in particular are expected to offer a wide variety of low-cost smartphones with narrow margins to compete with larger vendors.
“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 at ABI.