Fixed Mobile Convergence

A new study titled, “Less is More: The Worldwide Emergence of Low-Cost Android Smartphones” from In-Stat (News - Alert) forecasts that unit shipments for low-cost Android smartphones will approach 340 million worldwide in 2015.

The low-cost category (under $150) Android (News - Alert) phones are the only choice for low-income customers who cannot afford the typical Android smartphone selling for $400 to $500.

“The low-cost Android handset segment will cause some fragmentation in the Android platform,” says Allen Nogee, research director. “Most low-cost Android smartphones are likely to be released with Android 2.2 or 2.3, since these versions are a good blend of features with modest memory and processor usage.”

“The Ice Cream Sandwich (Android 4.0) step-up in memory and processor demands makes this release less attractive for low-cost Android devices,” Nogee added.

However, In-Stat finds that the low-cost smartphone area is Android’s to lose because the market gets more competitive as other OS vendors begin to target the space. These low-cost smartphones generally features EDGE and processors running at 600MHz speeds or less, and a single-core EDGE chip sells for well under $10, making them cost $150 or less.

Smaller phone manufacturers will sometimes purchase from the “gray market” where component manufacturers typically don't pay licensee fees, royalties, and taxes for the products they produce. This will further reduce the price of the smartphones.

Companies that compete in low-cost smartphone market include Huawei, MicroMax, Motorola (News - Alert), Samsung, Spice and ZTE, In-Stat research said.

Recently, ABI Research (News - Alert) predicted that the telecom boom in the emerging markets of the Asia-Pacific is expected to continue in 2011, and will drive the total mobile subscription rate in the region to grow by more than 15 percent. The mobile market in the Asia-Pacific still has the potential to grow at more than a 10 percent rate for the next two years.

According to ABI Research, the smartphone market is also expected to have healthy growth, with 24 percent share in total handset shipments in 2011, up from 17 percent in 2010. Smartphone shipments in Asia will see a significant growth of 56 percent in 2011, which indicates the growing demand for smartphones in emerging Asian markets.