Competition Within Budget Smartphone Market Looks Set To Soar

Friday, May 3rd, 2013 at 8:16 am

As more smartphone manufacturers battle it out for the best premium mobile device, it seems the competition in the budget market is also on the rise.

Here in the UK there is huge demand for high-end smartphones bursting with impressive specs and functionality. But, as Samsung and Apple become even more popular with consumers, other firms such as Nokia, HTC and BlackBerry continue to hover in the shadows of the leading players.

As a result, Nokia and HTC in particular have turned their attentions to other, emerging smartphone markets around the globe, and their approach is proving to be a hit.

Last month the Nokia 520 and 620 debuted in Asia and despite some delays, both handsets have already eclipsed the firm’s flagship, the Lumia 920, in terms of sales.

Both devices sparked a lot of interest amongst potential consumers and now occupy two of the top five smartphone spots in the Indian market, while the Lumia 920 is nowhere to be seen. This could well be because these Windows Phone-touting devices are being sold at around 20% less than the leading mid-range Android models, despite boasting similar specs.

Samsung leads the way

However it comes as no surprise that Samsung, which has recently launched the Samsung Galaxy S4, also dominates smartphone markets in developing countries. A recent report by mobile marketing firm Upstream indicates that Samsung is the preferred choice in countries including India, Brazil, Nigeria and Saudi Arabia.

Nokia devices were voted the second most popular option for consumers, followed by Apple and BlackBerry. This clearly shows that some of the companies reported to be ‘struggling’ here in the UK are actually thriving in other parts of the world.

Marco Veremis, CEO of Upstream, said there’s a distinct correlation between a consumer’s income and brand affinity: “in the developing world the mobile phone is an item of absolute day to day necessity, so brand choice is less important”.

But, how do smartphone manufacturers manage to make a profit on devices with such a low profit margin? Well, it’s all because larger quantities of low-end devices are being sold which adds up to a pretty impressive figure. These devices are what keep brands like Nokia alive and prove they are still relevant at a time when mobile technology is constantly changing.

Even Apple is rumoured to be launching a mid-range iPhone later this year as it looks to appealing to a wider user-base. The company is renown for its premium, high-spec handsets, so this alone signals that the mid and lower end of the smartphone market is becoming an increasingly attractive proposition.

However industry experts have said a budget iPhone could cause “chaos” in the smartphone market. A lower-spec handset is very likely to boost Apple’s year-on-year volume growth at a time when the smartphone market is expected to slow down by 36% this year.

Only time will tell

That said, Nokia has always stood out as a key player on the emerging markets, and this doesn’t look like changing any time soon. The firm’s quarterly report revealed that Nokia’s Asha line of budget devices is outselling the premium Lumia range by more than double. In the last quarter of 2012 the firm sold 14 million handsets, and only 4.4 million of these were Lumias.

Analysts at research firm IHS forecast that 31% of the overall global handset market will be made up of low-end smartphones by 2016. It’ll certainly be interesting to see how the popularity of smartphones in emerging markets increases over the next few years, but right now it looks like low-end handsets could be ruling the roost sooner rather than later.

Written by Sarah Hazelwood of Dialaphone, the home of great mobile phone deals.

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