Low-cost handsets to drive smartphone growth

Smartphone shipments are expected to grow 21% this year to 224 million, according to the latest forecasts from ABI Research. Vice president of forecasting Jake Saunders says, “While there is considerable fanfare and interest around the latest iPhone and Android phones from Apple, HTC and Motorola, ‘White Box’ or ‘Shanzai’ handset manufacturers are rapidly reshaping the low-cost handset segment as they redefine the ‘look and feel’ of the low-cost/ultra-low-cost segments.”

Many of these low-cost handset “brands” such as the “BlueBerry” handset, sail pretty close to trademark infringement. While it has “Bold” looks, RIM definitely does “not” manufacture it. These handsets have very localized distribution, lack the full functions of the originals, and cater to end-users who, while they may not have deep pockets, do aspire to be smartphone users. These limited-function handsets, along with other low-cost models, will notch up 219 million sales in 2010.

After four quarters of decline, the global mobile handset market has shown signs of rebound starting in 4Q 2009 with an expectation of further growth in 2010. “Total shipments of mobile handsets are projected to hit 1.3 billion in 2010, and are forecast to surpass 1.7 billion in 2015,” says industry analyst Celia Bo. “Moving to 3G technologies and beyond, increasing demand for smartphones is a key factor that will drive market expansion over the next five years.”

Despite ABI Research forecasts of a 7% drop compared to 2009, 2.5G handsets still hold the lead in the market, set to account for approximately 50% of this year’s total handset shipments. The decline in 2.5G handset shipments is expected to accelerate, taking 2.5G to 25% of the total market by 2015. The 3G handset market is forecast to show an 8% increase compared to last year. Total 3G handsets shipments should surpass 2.5G from 2011 to take the lion’s share in 2015 with 68%.