The rise of the low-cost smartphone and the spread of mobile commerce
The feature phone is gradually giving way to the smartphone, yielding in markets once thought impervious to expensive mobile devices. But in many parts of the world, smartphone shipments today account for a larger percentage of mobile handset shipments than feature phones thanks to the rising availability of low-cost models. According to a new study, the gap in shipment numbers will only grow, bringing access to tools like mobile payments and m-commerce to a larger number of consumers.
The "Mobile Handset Markets Database" compiled by ABI Research indicates that the smartphone market today is segmenting into three cost tiers — low, medium and high. By 2018, ABI expects that low-cost phones will account for 46 percent of handsets shipped by 2018, up from 28 percent in 2012.
In real numbers, shipments smartphones costing $250 or less will grow from 259 million in this year to 788 million in 2018 — more than a 300 percent increase, according to ABI data. Mid-cost (below $400) and high-cost ($400+) smartphone shipments are expected to grow from 635 million to 925 million (31 percent) over the same period.
The growth of smartphones in prepaid and emerging markets will be the primary driver of low-cost smartphone growth, ABI said. Developed and subsidized markets are also finding that low-cost smartphones can capture the remaining consumers that have yet to convert to a smartphone, while minimizing the margin impacts stemming from subsidizing high-cost smartphones.
"As the feature phone segment continues to lose its battle for relevance, the low-cost smartphone has become the tool for operators seeking to drive increased data revenues," said Michael Morgan, senior analyst at ABI Research.
The "Mobile Handset Markets Database" from ABI includes files that detail smartphone and mobile handset shipments, forecasts, and market share.
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