Emerging world drives cheap smartphone boom

March 3, 2015
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In response, US online giant Google has launched a low-cost smartphone in India for $105 (Sh9,500)/FILE
In response, US online giant Google has launched a low-cost smartphone in India for $105 (Sh9,500)/FILE
BARCELONA, Spain, Mar 3 – Phone and Internet firms are rolling out cheaper handsets and may turn to hot-air balloons to boost network coverage in developing countries, where sales of smartphones are booming.

Even though mobile network coverage is generally weaker in the developing world, firms are mining a gold rush of new clients in China, India and beyond, as smartphone demand slows in the rich world.

Several top phone and Internet companies attending this week’s Mobile World Congress in Barcelona, the biggest wireless telecom fair on the planet, have unveiled new products aimed at developing markets.

Smartphone sales grew by 23 percent worldwide in 2014 to 1.3 billion units, according to a study by German research institute GfK.

As demand has slowed in smartphone-saturated markets such as western Europe, Japan and north America, it has exploded in Latin America, southeast Asia and Africa.

In response, US online giant Google has launched a low-cost smartphone in India for $105 (Sh9,500).

Its US rival Microsoft says it plans one that will cost $29 while the Mozilla foundation, owner of the Firefox search engine, plans one for $25.

The world’s biggest seller of smartphones, South Korean firm Samsung, has also launched products tailored for the Indian market, as its major US competitor Apple focuses on its higher-end iPhone line.

The rise of budget smartphones has also been driven by manufacturers such as Xiaomi of China, which overtook Samsung for sales in the Chinese market last year.

By 2020 about three quarters of the world’s smartphones are expected to cost less than $100, consulting group Gartner estimated in a study.

“You get good lower-end smartphones for $20 and the higher end for the mass market is now around $60,” said Sigve Brekke, Asia director for Norwegian telecom group Telenor, which operates in six countries in the region.

“We think that we will see these prices continue to fall this year.”

He forecast there would be smartphones connected to the 4G mobile network – currently the most advanced – for $45 by the end of this year.

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