Mid-range phone models will begin to feel the squeeze and customers opt more for the high-end smartphone and low-cost handset segments during the next five years, according to study from ABI Research.
The firm said the mid-tier “enhanced phone” sector is currently the largest tier with unit shipments of 854 million in 2007. But the segment will ship only 441 million units in 2013 and will be eclipsed by the high- and low-end segments, said ABI.
“As we see more user sophistication and demand for high-end features, handset manufacturers will continue to push functions of high-level smartphone operating systems further down their product lines,” said ABI Research director Kevin Burden. “Their smartphone portfolios will grow, and with them, the entire smartphone market.”
Operators will encourage growth of the smartphone segment as well because smartphone customers tend to generate higher revenues.
Meanwhile, large emerging markets like China, India and Brazil will drive the low-cost and ultra-low-cost handset categories, which ABI predicts will represent the largest handset category by shipments by 2013.
“While the unit shipments of ultra-low-cost handsets will be dramatic over the forecast period, the device class is only expected to account for 6% of the market’s overall revenue,” noted Burden. “But vendors will continue to pursue these markets for the sake of brand-building and the prospect of eventual upward migration by users.”
