Low-cost smartphones to grow to 45 million units in 2012

Telecom Lead Asia: ABI Research said handset shipments
are set to grow to 2.2 billion in 2016 from 1.7 billion in 2012, registering a
growth of 29 percent. Out of this, smartphone units will grow to 1.1 billion in
2016 from 643 million in 2012. Low-cost OEMs that are shifting to
smartphones, such as Huawei and ZTE, will be a key driving factor for the
growth and innovation in the sub-$150 smartphone segment. Low-cost smartphones
will grow from 45 million shipments in 2012 to 170 million in 2016.

Smartphone segment will be the main driver for the
significant growth. The smartphone segment is forecast to become larger than
the ultra-low cost, low-cost, and feature phone segments combined by 2016.

The total shipments of non-smartphones will grow 1.08
billion in 2012 to 1.09 billion in 2016 while smartphone shipments will grow
from 643 million to 1.1 billion over the same period.

OEMs that have had success addressing the low-cost
handset segments will be under tremendous pressure to shift their portfolio to
smartphones. These companies currently serve consumers with low disposable
incomes. These OEMs will be prompted to deliver smartphones that are price
competitive to low-cost handsets.

This emerging scenario could become a very dangerous
situation for Nokia’s handset business as the smartphone and feature phone
segments will not be able to support each other in trying times,” said Kevin
Burden, vice president and practice director, mobile devices.

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