Low-Cost Handsets to Account for Over 50% of Mobile Phones by 2014

A recently published study from Juniper Research shows that the adoption of low-cost mobile phones will grow in the future. According to the research firm, both high-end and low-end additions will increase, while the mid-level market will diminish. The low-cost handsets will be mainly bought in developing areas, while the high-end smartphones will see a lot of traction from users in developed countries.

According to the research firm, the total number of low-end handsets and smartphones will rise up to 79 percent of all new mobile phones released on the market by 2014. At the same time, Juniper Research also states that carriers will face “a massive influx of new users from low-income socio-economic groups in developing markets,” while the demand for high-end smartphones in developed markets is also expected to rise.

It seems that leading vendors like Nokia, Apple and Research In Motions are those to benefit the most from these market trends, while mobile phone makers like Sony Ericsson and Motorola will be greatly affected, given the fact that they are mainly focused on the mid-level segment. As such, these companies will have to change their market strategy so as to remain competitive.

Andrew Kitson, low-cost handset report author, says, “Low-cost handset shipments will number more than 700 million in 2014, up by 31% from levels seen in 2008, albeit down slightly from a peak of 716 million in 2012 as some users begin to upgrade to costlier devices. At the same time, smartphone shipment volumes will grow continuously across the forecast period, reaching almost 360 million by the end of the period. We therefore expect that mid-range device sales volumes will fall by more than 41% over the period.”

The new study also shows that 23 percent of the low-cost handsets sold on the market went to the Indian Sub Continent region in 2008, as operators tried to offer low-income users products that were compatible with their needs. The same area is expected to account for 22 percent of the low-cost handset sales by 2014. In addition, the report also shows that low-cost, highly targeted localized information services like the Nokia Life Tools offering helped the sales in emerging markets a lot.

More details on the ‘Low Cost Handsets: Markets, Opportunities & Forecasts 2009-2014’ study can be found on Juniper Research's website, where the low-cost mobile handset whitepaper is also available for free download.