Entry-level phones

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Mark Peters
brand ABI Research category Industry news

Entry-level cell phones

content type Press information Mail the editor Posted by Mark Peters
Monday, July 20th 2009 - 14:30 CEST - Comments: 0
A BI Research released a new in-depth market report. It reports that Entry-level cell phones enjoy 24% annual growth through 2014. The world’s largest underserved markets for mobile communications are in developing nations and regions. Asia, Africa, Latin America all have vast potential, but formidable barriers stand in the way. Among the most immediate: the low disposable income of most of the population. Low cost and ultra-low cost cell phones are seen as part of the solution to that problem, and according to a new study from ABI Research the two categories together will see a compound annual growth rate (CAGR) of 24% over the next five years.
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Entry-level cell phones


Entry-level cell phones

"The price of a entry-level cell phone is widely seen as critical to the tipping point for mass adoption in emerging markets," says industry analyst Michael Morgan. Cell phones are rarely subsidized in emerging markets. The GSM Association has pegged the maximum desirable entry-level cell phone price at $25 through next year and at $20 for 2011-2012. Morgan extends that curve: "I believe in 2013-2014 the top price for a entry-level cell phone will be no more than $15, which is feasible because some cell phone models are hitting that price today."


Entry-level cell phone


ABI Research Entry-level cell phone market report

Other inducements fostering uptake of mobile services in emerging markets include value-added data services using locally relevant content. Also helping: more enlightened attitudes among government regulators towards reducing taxes and tariffs on cell phones and services. However, emerging markets do present significant challenges. For cell phone vendors, the low prices mean margins so thin that profitability demands major economies of scale. (Fortunately some of these populous countries lend new meaning to the words "mass market.") Vendors must also control a wide IP portfolio and manufacture locally to control royalty, import and labor costs. The research shows that on all these counts, Nokia is the out-and-out market leader.


Cell phones


Market opportunities for entry-level cell phones

Morgan concludes, "Entry level cell phones must deliver high value to low-income emerging market consumers who want good quality at low cost." ABI Research's study "Entry Level Devices" discusses current and future market opportunities for entry-level cell phones. In addition to market information, this report highlights critical considerations for cell phone vendors to navigate when designing and marketing entry level cell phones. It includes forecasts for the 2008 to 2014 period. For more information about the entry-level cell phone market report visit the company's website.

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