Low cost smartphones, which are those smartphones that have a wholesale price below $200, are increasingly appearing in OEM and operator portfolios in both emerging and developed markets. According to ABI Research, shipments of these devices will 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.
The world has reference designs from the likes of Qualcomm and Mediatek to thank for the wider adoption of smartphones, as they [reference designs] allow regional and Chinese OEMs to deliver dual- and quad-core smartphones at or below $200. Moreover, 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. Plus we have companies such as Alcatel, CoolPad, Huawei and ZTE leveraging their increased market share to build brand recognition and move up market, putting pressure on the tier I OEMs to respond.
In addition to emerging markets, low-end smartphones are also finding their place in the developed world where they are appearing as a solution for prepaid operators.
All said, we’re not surprised that ABI Research predicts that these devices will account for 44% of all smartphone shipments as the market looks to capture the next billion smartphone users..