Why Top Smartphones May Have to Get Cheaper

If you want a top smartphone, there’s a good chance you’ll still have to pay a pretty penny for it. But this reality may change – and significantly – within the next five years.

New reports project that half of all smartphones sold by 2017 will be purchased for less than $150.

“As the market develops, the supply chain will increasingly be divided between two camps – the innovators who will continue to introduce new features and high-performance components to the market place and followers who will take this innovation to the mass market in later years,” says Informa analyst Malik Saadi.

These industry projections come on the same day that new rumors surface about Apple’s plans for the iPhone next year.

“We believe the delta between smartphone market growth and iPhone growth will push Apple to release a lower priced device despite comments to the contrary,” adds Piper Jaffray analyst Gene Munster. “Looking back historically, Apple always priced Macs as the higher end of the market and ultimately the iPad, and now the iPad mini, became the ‘Mac for the masses.'”

In other words, Apple may be one of the first “big brands” in smartphones to go cheaper with an exclusive entry-level iPhone model designed to entice new smartphone buyers with a device that is slightly modified (meaning fewer features) from its more elaborate, full-featured big brother.

According to Roger Cheng of CNET, the shift to cheaper smartphones “isn’t good news for handset manufacturers who are used to creating high-end devices that garner hefty profit margins.” But it would be good news for consumers — and a profound development for the global expansion of the smartphone industry and smartphone adoption.

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