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Low-Cost Smartphone Shipments will Reach 758M

Many countries around the world still have relatively high-priced wireline broadband access to the internet that's a barrier to increased mainstream adoption -- it's expensive to install and to use. In contrast, mobile internet access via a smartphone is more attainable.

Low cost smartphones -- defined as those smartphones with a wholesale price below $200 -- are increasingly appearing in OEM and operator portfolios in both emerging and developed markets.

In many developing nations, the availability of these devices is a catalyst to socioeconomic advancement. It can change lives, for the better, by helping to free people from poverty.

The ultimate upside opportunity for mobile network operators is for low-cost smartphones to drive adoption in emerging markets where handset subsidization and disposable income are scarce.

Market intelligence firm ABI Research forecasts low cost smartphone shipments to grow from 238 million in 2013 to 758 million by 2018, driven by the low penetration of smartphones and large subscriber bases found in BRIC countries.

"Despite the low cost moniker, research has shown that the feature gap between low- and high-end smartphones is decreasing, making low cost smartphones a ‘good enough’ solution for price sensitive consumers in all markets," said Michael Morgan, senior analyst at ABI Research.

Reference design solutions from Qualcomm and Mediatek are already permitting regional and Chinese OEMs to deliver dual and quad core smartphone solutions at or below $200.

Furthermore, white label and regional tier II smartphone OEMs are increasingly squeezing device margins to win on price and capture market share from tier one smartphone offerings.

Low cost OEMs, such as Alcatel, CoolPad, Huawei, and ZTE are leveraging their increased market share to build brand recognition and move up market, putting pressure on the tier-one OEMs to respond.

"We are increasingly seeing low cost smartphones appear as a solution for prepaid operators in developed markets," adds senior practice director Jeff Orr.

By 2018, ABI Research believes low cost smartphones will account for 44 percent of all smartphone shipments as the market looks to capture the next billion smartphone users.

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