Entry-level smartphones prices to reduce almost 50% in 5 years

Shipments of entry-level smartphones are set to exceed 185 million globally by the year 2015, driven initially by operators’ own brand devices which are intended to boost data usage on their networks, finds a new report by Juniper Research.

Pricing of these low cost smartphones will come down from $150 in 2010 to $80 in 2015, due to increased competition and the availability of lower cost chipsets, states the report.

“In 2010, operators like Vodafone and Orange kick-started the low-cost smartphone market with devices in the $150 range,” says Anthony Cox, Analyst at Juniper Research and author of the report, “pricing of smartphones will come down to $80 by 2015,” he says.

Further findings from the Low Cost Handsets & Entry Level Smartphones report include:

  1. Chinese and Indian handset vendors such as Micromax are expected to launch Android-based smartphones at competitive prices for their local markets in the near future
  2. Compression and remote browsing is enabling the mobile internet to reach low-cost handsets at price points as low as $25
  3. Content strategies in developing markets are becoming important to reduce churn for the operator and to tie in the customer to the handset brand for the vendor
  4. Barriers to entry into the handset market have come down, opening the door for local players in growth markets such as India and China

As a first tier of local players like ZTE and Huawei now seek to extend their geographical reach to the US and beyond, a second tier of Indian and Chinese players are becoming increasingly important in their local handset markets, finds the report.

Juniper said that such players do not have the sophisticated content strategies that veteran handset manufacturers like Nokia have, however.

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Entry-level smartphones prices to reduce almost 50% in 5 years