Low-Cost Smartphones to Prevail in Emerging Markets
By Jacqueline Lee, Contributing Writer
Research firm NPD In-Stat (News - Alert) predicts that low-cost smartphones will make up 80 percent of market share in Africa, India and China by 2015. Low-cost smartphones, for the purposes of the research, are those that retail for less than $150.
Most smartphones in this price range run Android (News - Alert) 2.2 or 2.3, allowing them to provide many features with less memory and processor usage. On the lowest end, these phones utilize EDGE chips that run at fewer than 600 MHz. EDGE chips retail for around $10, which lowers costs significantly for manufacturers. These smaller manufacturers often purchase from the “gray market,” meaning that suppliers sometimes do not pay taxes, royalties or licensing fees for the items they produce.
“All-in-all, the way that Android has spread worldwide, low-cost Android will also spread worldwide. But, where most Android phones are being sold in developed regions of the world, low-cost Android will flourish in emerging areas,” said Allen Nogee, NPD In-Stat’s research director. “Samsung has bada, and Nokia (News 
- Alert) is developing Meltemi. In addition, Microsoft has stated that it wants to sell Windows Phone in these developing regions as well and could aggressively lower prices to gain market share.”
NPD In-Stat forecasts worldwide low-cost Android phone shipments to reach 340 million units by 2015. This market area will cause some segmentation in the Android platform because newer platforms, like Ice Cream Sandwich (Android 4.0) require too much memory and processing power for phones in this range.
The segmentation of Android may pose some problems for Google (News - Alert) in emerging markets. “While Google profits in these regions from advertising revenue,” said Nogee, “Nokia and Samsung (News - Alert) benefit the old-fashioned way, by selling hardware.” NPD In-Stat’s full report, entitled “Less is More: The Emergence of Low-Cost Android Smartphones”, researchers examine the challenges that Google will face as the low-cost Android market deepens.
Feature phones accounted for 70 percent of the world’s handset sales in 2011. The Nokia Series 40 has sold over 1.5 billion units worldwide since its release in 1999. Another feature phone, the Samsung E250, is the best selling phone in Africa.
Jacqueline Lee is a TMCnet contributor who produces web content, blogs and articles for numerous websites including wikiHow.com. Her background is in business and education.
Edited by Jennifer Russell
