Page 38 - Mobile World Daily - Day One

ANALYSIS | SMARTPHONES

Gu Zhang,
Forecasting Analyst, GSMA Intelligence
www.gsmaintelligence.com

From feature phones
to smartphones,
the road ahead

Smartphones began as a developed run on these devices in 2020 as smartphones Figure 1: Percentage of regional total connections (excluding M2M)
world phenomenon but they are become ubiquitous.
increasingly gaining traction in Source: GSMA Intelligence
emerging markets too, triggering a While heavy operator subsidies have
migration away from basic and contributed significantly to this shift in device connections were located in the developing on basic and feature phones.
feature phones migration in the developed region, the world in 2014. We expect that the rate of Our research shows that, while smartphone
availability of smartphones at the same price smartphone adoption will continue to
The increasing number of smartphone as basic and feature phones shows that the increase over the coming years, driving the prices have declined since 2008 - by 30 per
models priced under the $100 mark is latter device category is rapidly becoming region to encompass four in every five cent in Asia, 25 per cent in Latin America and
the main driver of consumer migration obsolete. smartphone connections globally by 2020. 20 per cent in Africa - the majority of
from basic and feature phones to The wider availability of more affordable smartphones in the developing world are
smartphones. GSMA Intelligence research A study of Best Buy’s portfolio of smartphones is an important factor behind priced above the $100 mark, whereas the
shows that by 2020, around two thirds of all ‘unlocked’ handsets in the US shows that the this trend, however we expect that the 'sweet spot' for these regions is considered to
connections globally (excluding M2M) will be vast majority (84 per cent ) of mobile phones transition away from basic and feature be in the $25-$50 range.
smartphones, illustrating the rapid shift away offered in the country are smartphones (most phones in the region will take longer as the
from basic and feature phones, which of them running on Android), with a number availability of low-cost smartphones (below Last year, a number of smartphones priced
encompassed more than half of global of them priced at the same level as that of the the $50 price point) is still limited. between $25-$50 were introduced across the
connections in 2014. Data terminals (e.g, remaining basic and feature phones – less developing region, with new models from
dongles, tablets, routers) make up the than $100 (Average Selling Price, before As of 2014, less than a third of all several handset manufacturers. These
remaining share of connections (at just below discounts and subsidies). Around half of connections in the developing region are launches only mark the start of a price
10 per cent in 2014). smartphones on offer are priced below $200, smartphones, showing the large prevalence of expansion trend towards low-cost levels that
while 29 smartphones are priced between $47 basic and feature phones currently. By 2020, will spread to more developing economies,
SMARTPHONES BEGAN AS A and $80. Devices that form the portfolio of we expect that only around 30 per cent of contributing to the adoption of smartphones
DEVELOPED WORLD PHENOMENON ... basic and feature phones on offer still hold a connections in the region will still be running in the region – but this will not happen
slight pricing advantage, but this may not be overnight.
In many developed markets, smartphone the case for long.
adoption is approaching the 70-80 per cent
‘ceiling’ at which growth tends to slow. ... BUT THE FOCUS IS SHIFTING TO
Across the developed world, basic and DEVELOPING ECONOMIES
feature phones represented only around a
quarter of all connections in 2014, while only In 2010, the global smartphone connections
a residual share of the market is expected to market was equally distributed between the
developed and developing regions. However,
almost seven in every ten smartphone

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