Mobile Handset Market Polarizing Between High-End and Low-End Markets

The mobile handset market is becoming increasingly polarized with low and high-end devices thriving at the expense of the mid-range products, according to a new study.

 

While the market for low cost handsets continues to grow in emerging markets, and the demand for high-end smartphones increases in developed regions, the mid-range manufacture is being squeezed, the study shows.

 

In fact, low-cost handsets and smartphones will together account for almost 79 percent of all new mobile phones by 2014, or just over one billion units in all.

 

Low-cost handset shipments will number more than 700 million in 2014, up by 31 percent from levels seen in 2008, 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,” said Andrew Kitson, author of the Jupiter Research study, titled “Low Cost Handsets: Markets, Opportunities and Forecasts 2009-2014”.

 

“We therefore expect that mid-range device sales volumes will fall by more than 41 percent over the period.”

 

This has placed vendors such as Nokia, Apple and RIM in an enviable position as those companies will most surely be the biggest benefactor of these trends, while players operating more in the mid range market such as Sony Ericsson (News - Alert) and Motorola have to rethink their strategy, according to Kitson.

 

At the same time, operators and vendors are prepared for the continued explosion from low-income socio-economic groups in developing markets can expect an equally optimistic outlook.

 

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 (News - Alert) to meet low-income users’ needs in markets such as India.

 

The study also shows that by 2014, the region will account for 22 percent of sales and emerging markets will receive a  boost from the availability of low-cost, highly targeted localized information services, such as Nokia’s Life Tools.