Low-end Phones Expected to Drive Smartphone Growth

Amid speculation that the tremendous growth rate of smartphone sales can’t be sustained as markets become saturated, a new study from iGR predicts more growth from 2013-2018. According to the article, this is because “less expensive smartphones have recently become available [and] smartphone growth has been significant in several developing regions of the world, including Latin America, the Middle East and Africa, Eastern Europe, and Asia-Pacific.”

iGR’s latest study entitled, “Global Handset and Smartphone Sales Forecast, 2013-2018,” provides an in-depth analysis and sales forecast of mobile devices, including smartphones, by region. It further examines manufacturers, operating systems, apps and software capabilities, and trends in the equipment itself.

The information is valuable to all stakeholders in the mobile market including investors, innovators, developers and retailers. The market study is available for purchase and electronic download through iGR.

iGR’s findings are supported by some major players in the industry. According to the February 26 2014 article by Svem Grundberg, Thomas Gryta and Will Connors, of the Wall Street Journal, the head of Nokia’s mobile division, Timo Toikkanen, said, “The fastest growth really is in the affordable smartphone space.”  He added that affordability “makes a huge difference in developing markets."

According to the Wall Street Journal, “Mozilla has been most aggressive about pushing prices down.” Johnathan Nightingale, who heads Mozilla's Firefox browser and operating system business, said, “We're targeting people who never had this kind of Internet access before.”

Also weighing in on the issue was Mario Zanotti, who heads operations at Millicom International Cellular SA, Millicom International operates in Africa and Latin America. Zanotti said that “he has seen ‘decent’ Android-powered smartphones made by little-known Chinese companies that are selling for around $45. And prices continue to drop.”

While this trend and desire for inexpensive phones is a huge growth opportunity for mobile companies and service providers, these lower end phones are not up to the standards of the US and  western countries. For example, “Mozilla's $25 phone, which the company is building with Chinese chip maker Spreadtrum Communications Inc. and expects to release this year, will have just 128 megabytes of random-access memory, a far cry from the 2 gigabytes found in Samsung's latest Galaxy S5 flagship phone. The Mozilla phone's low-resolution screen will measure just 3.5 inches diagonally. Samsung's latest phone has a high-resolution screen that is bigger than 5 inches.”  Nightingale explained, "Our prototype doesn't feel like a Galaxy S5, and it's not supposed to, either, but it has apps; it can use the Web." (WSJ)

Another train of thought among experts is that as desire for tablets rise and parts for smartphones become more universal, the period for premium pricing for smartphones is coming to an end. (Gartner)