14 DAY TRIAL // The number of smartphones delivered to the market during the ongoing year has increased significantly when compared to last year, yet their prices are said to have diminished. According to a recent report from ABI Research, the number of smartphones that cost under $200 has reached 27 percent of the total number of such devices launched on the market.
According to the research firm, this is an important growth, as only 18 percent of the smartphones were priced under $200 in the past years. Moreover, ABI research also says that the percentage will be even higher in the near future, and that by 2014 almost 45 percent of the smartphones will come to the market for a price of under $200. Consumers' attitude towards smartphones is one of the main factors of this change, the research firm also states.
“Manufacturers see consumers increasingly demanding smartphones, because of their better understanding of the value that a smartphone delivers,” says mobile devices practice director Kevin Burden. “Nearly all consumers used to choose handsets based on the physical characteristics of the hardware, not the software inside. The iPhone changed that: more users are now shopping for their handset based on the operating system and software, which is something once thought to be very unlikely.”
Smartphones and feature phones now tend to sport similar pricing, ABI Research says. Both mobile phone makers and wireless carriers need to focus on both segments of the market, including users who are interested in a basic replacement phone, and those interested in one of the mobile operating systems available today. Heavy subsidies offered by carriers in certain markets are another factor that influences the performance of smartphones.
“Prices will hold at a certain point,” Burden notes. “We may never see a $30 smartphone. But over time, smartphones will take a substantial part of the mainstream handset market.” Some of the currently available smartphones are not subsidized, yet manufacturers seem to tend to offer a mix to users: both high-priced devices and moderately priced smartphones are making their way on the shelves. ABI Research forecasts that the highest growth during the next five years will be seen by smartphones priced between $100 and $200.