Low cost smartphones such as the rumoured budget iPhone 5C, with an average selling price below $200 or £135, will make up nearly half of all smartphone sales by 2018. The iPhone 5C is said to be due for release as early as September 6.
Cheap smartphones are set to become increasingly prevalent in both emerging and developed markets across the world. See: iPhone 6 release date and rumours.
Apple's iPhone 5C, if it ever becomes reality, is said to feature a plastic case and more rounded edges than Apple's flagship iPhone 5.
When Apple released a budget Mac back in the early 1990s it called it the Mac LC, standing for Low Cost - so maybe the 5C could be a nod back to that. We can't see it standing for 'cheap" - that's not at all the Apple way.
ABI Research forecasts low-cost smartphone shipments to grow from 238 million in 2013 to 758 million by 2018, driven by the low penetration of smartphones and large subscriber bases found in BRIC countries of Brazil, Russia, India and China.
"Research has shown that the feature gap between low- and high-end smartphones is decreasing, making low cost smartphones a 'good enough' solution for price sensitive consumers in all markets," says senior analyst Michael Morgan.
Reference design solutions from Qualcomm and Mediatek are permitting regional and Chinese OEMs to deliver dual and quad core smartphone solutions at or below $200.
Furthermore, white label and regional tier II smartphone OEMs are increasingly squeezing device margins to win on price and capture market share from tier I smartphone offerings.
Low cost OEMs, such as Alcatel, CoolPad, Huawei, and ZTE are leveraging their increased market share to build brand recognition and move up market, putting pressure on the tier I OEMs to respond.
"We are increasingly seeing low cost smartphones appear as a solution for prepaid operators in developed markets," adds ABI senior practice director Jeff Orr.
"By 2018, ABI Research believes low cost smartphones will account for 44% of all smartphone shipments as the market looks to capture the next billion smartphone users."
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