Researchers at Informa Telecoms & Media have looked into their crystal ball and seen the future of the smartphone market. It’s going to be one dominated by low-end smartphones.
At the heart of the study is the idea that emerging markets, like China, India, and much of Africa, will be seeing a dramatic increase in demand for smartphones, particularly affordable ones. That, combined with a steady stream of entry-level smartphone users in developed markets, will lead to the average smartphone in 2017 being priced at about $150 (for reference, the average was $188 in 2011). The shift is predicted to be dramatic – in 2011, high-end smartphone sales accounted for 85 percent of all smartphone sales. The study sees that number dropping to 33 percent by 2017, lower than the 52 percent market share forecast for low-end smartphones.
If you do the math, that doesn’t leave much room for mid-range smartphones. That spells trouble for a lot of handset makers, according to the researchers. While companies like HTC, Nokia, and (maybe?) Research in Motion are still players in the high-end market today, it’s only going to become more difficult for them to compete in an already cutthroat market. Apple and Samsung were found likely to continue to dominate that high-end market, possibly squeezing out the companies mentioned above, along with Sony and LG. After all, as the price of phones drops, profitability will become that much more difficult. That leaves the low-end market, which will be no cakewalk either, as pressure will be felt from rising Chinese companies like Huawei and ZTE.
It’s hard to say how much the price of a high-end smartphone will really drop, though, because you have to figure most of the drop in average smartphone price is going to come from more low-end sales. One thing is for sure – if this study is accurate, the Apple-Samsung war is only going to become more insufferable.