Low-cost handsets to account for over half of all mobile phones by 2014

HAMPSHIRE, UK: New research has shown how the mobile handset market is becoming increasingly polarised between low cost handsets for emerging markets and high-end smartphones for developed regions –- with the mid-range handset market being squeezed.

Low-cost handsets and smartphones will together account for almost 79 percent of all new mobile phones by 2014, or just over 1 billion units in all. Operators and vendors are preparing to deal with a massive influx of new users from low-income socio-economic groups in developing markets and a rising demand for complex ‘smart’ devices from affluent users in developed markets.

Vendors such as Nokia, Apple and RIM (makers of Blackberry) are well positioned to benefit from these trends whilst players operating more in the mid range market such as Sony Ericsson and Motorola are having to rethink their strategy.

According to Low-cost handsets report author Andrew Kitson: “Low-cost handset shipments will number more than 700 million in 2014, up by 31 percent 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 percent over the period.”

Other findings from the low-cost handsets research include:
* In 2008, the Indian Sub Continent region accounted for the majority (23 percent) of low-cost handset sales, due to efforts by operators such as Vodafone to meet low-income users’ needs in markets such as India: by 2014, the region will account for 22 percent of sales.

* Take-up in emerging markets will be boosted by the availability of low-cost, highly targeted localised information services, such as Nokia’s Life Tools offering.