Low cost handsets to account for half of all mobiles by 2014

New research from Juniper has shown how the mobile handset market is becoming increasingly polarised between low cost handsets for emerging markets and high end smartphones for developed regions, with the mid range handset market being squeezed.

Low cost handsets and smartphones will together account for almost 79% of all new mobile phones by 2014, or just over one billion units in all. Operators and vendors are preparing to deal with a massive influx of new users from low income socio-economic groups in developing markets and a rising demand for complex ‘smart’ devices from affluent users in developed markets.

Vendors such as Nokia, Apple and RIM (makers of Blackberry) are well positioned to benefit from these trends whilst players operating more in the mid range market such as Sony Ericsson and Motorola are having to rethink their strategy.

According to the low cost handsets report author, Andrew Kitson: “Low cost handset shipments will number more than 700 million in 2014, up by 31% from levels seen in 2008, albeit 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. We therefore expect that mid range device sales volumes will fall by more than 41% over the period”.

Other findings from the Low cost handsets research include: In 2008, the Indian Sub Continent region accounted for the majority (23%) of low cost handset sales, due to efforts by operators such as Vodafone to meet low income users’ needs in markets such as India, so by 2014, the region will account for 22% of sales; Take up in emerging markets will be boosted by the availability of low cost, highly targeted localised information services, such as Nokia’s Life Tools offering.