Low-Cost Phones Lead Charge as Smartphone Shipments Rise 19 Percent

The latest Juniper Research numbers show global smartphone shipments in 2014 will total 1.2 billion, compared with 985 million in 2013. Inexpensive phones in developing markets are driving the growth.


Inexpensive smartphones being sold around the world in developing nations are apparently helping to push smartphone shipment growth to 1.2 billion devices, up an estimated 19 percent in 2014 over 2013, when 985 million smartphones shipped, according to the latest figures from Juniper Research.

The new estimates were released Sept. 16 in a research report, Smartphone Markets: Trends, Shares & Forecasts 2014-2019, by analyst Nitin Bhas. "The market is expected to be driven by growth in emerging markets, due to a continued surge in sales and adoption of low-cost Economy ($75-$150) and Ultra-Economy (sub-$75) smartphones," he wrote. Such emerging markets "are now vital to success in this sector, with the gap between the growing emerging markets and the stagnating mature markets closing."

One reason for the new growth in the lower end of the market is that the upper end, filled with premium phones like iPhones and others at premium prices, is becoming saturated by users who have the devices they want and need, said Bhas in an email reply to an inquiry by eWEEK. That lower end of the market didn't exist in 2007 when the first Apple iPhones appeared.

"The emergence of the Economy or Ultra-Economy price band, coupled with the relative stagnation of the premium bands in developed markets, means that vendors need to diversify their product ranges to include these new consumers," wrote Bhas. "Most of these new entrants have come from the emerging markets, most notably as Xiaomi and ZTE from China and Micromax from India. These vendors, although comparatively young, now have the experience of operating in low margin environments."

A key growth spurt in the market is being played out right now in India, he wrote, where significant growth is expected "from both home-grown and international brands launching new products specifically tailored to the budget end of the market."

Interestingly, Google just introduced a line of low-cost Android One smartphones in India this week to make phones and mobile service more affordable to some 5 billion people around the world who aren't yet smartphone users. The fully featured smartphones start at about $105 each, according to a recent eWEEK story.

"The key markets for these budget devices in 2014 are the Far East and China and the Indian Subcontinent, with a large number of consumers who want smartphones but may be unable to pay premium prices," wrote Bhas. "While the expectations of these consumers will probably be low in terms of smartphone capabilities, vendors would do well to offer services tailored to each market to drive habit formations and insulate against other international brands. Also, by focusing on localization, there is an opportunity for vendors to establish positive consumer experiences, and therefore increased potential for long term loyalty."

The shifts in the marketplace are already happening and are expected to continue into the future "as these price sensitive markets become more of a focus for growth for smartphone vendors, including tapping previously unavailable regions," he wrote. "This will not, however, impact the ultra-premium phones (those priced $600 or over), whose buyers are likely unconcerned by price."

The report, which is also available in a free white paper form in exchange for registration, also estimates that Apple and Samsung will account for nearly 45 percent of the global smartphones shipped this year, while the average selling price for a smartphone will decline globally to $274 by 2019.

A Juniper Research report in November 2013 estimated that the number of employee-owned smartphones and tablets used in the enterprise will exceed 1 billion by 2018, as the growing trend of bring your own device (BYOD) redefines business connectivity. The report, Mobile Security: BYOD, mCommerce, Consumer & Enterprise 2013-2018, found that although the trend has the potential to benefit organizations in terms of enhanced employee satisfaction and productivity, the threat from unprotected employee mobile devices is of significant importance.