2015 Is The Year Of The Sub $100 Smartphone

India is already the fastest growing smartphone market in the world, predominantly powered by the demand for cheap smartphones.

The smartphone market is probably one of the prime examples of how the top-to-bottom innovation cycle works. While the past few years have been all about the iPhone and Samsung’s rise and fall, we’re now entering a phase where serving emerging markets like India, Africa and Latin America is big game.
Android One Phones released in India
Emerging markets have caused the focus to shift from high-end to the low-end, and 2015 is all set to be the year sub $100 smartphones with LTE connectivity become mainstream. The move will open the doors for millions of new users to gain access to high-speed net connectivity, which is where all the excitement lies.

Everyone’s Looking At The Low-End Market

The battle for supremacy in the high-end smartphone market has pretty much been boiled down to iOS v/s Android, and if Apple’s recent record 75 million iPhone in Q4 2014 is anything to go by, the Cupertino giant is winning. We don’t expect to see any major shifts in power here, however the low-end device segment looks a lot more dynamic.

  • Cyanogen most famous customer may be OnePlus, but the company’s focus has been on powering low-end devices. It’s recent tie up with Micromax to form YU is a great indicator of this, along with the company’s roll out of official ROMs for Google’s Android One devices.
  • Microsoft’s ambitions to take on Apple’s iPhone may not be dead, but the company’s focus in the mobile space has shifted to low-end devices. The software giant’s decision to make its Windows 8+ software free for all devices below 9-inches is seen as a way to promote manufacturers to use it platform on sub $100 smartphones.
  • Google is already king of the low-cost smartphone hill, but even it realized that it’s sub $100 devices are lacking quite a bit. To solve this the company rolled out its Android One program, and while Google’s low-cost smartphone initiative has failed to gain steam, it hasn’t given up on it just yet.
  • Samsung doesn’t seem to be learning from its mistakes. While its device sales have plummeted over the past one year owing to its plasticky feel, we feel the real grouse consumers have is with the company’s take on Android software. Still, how does it plan to fix this? Tizen OS seems to be what Samsung thinks will help give it a fighting chance to compete in the sub $100 market.
  • Another contender in the low-cost smartphone platform wars is Mozilla, equipped with its Firefox web-based OS. The first devices running the OS made their debut in 2014, but the response so far hasn’t been great. Still, looking at it in a positive light, Firefox OS is what Google seems to be transitioning Android towards – a web OS.

Regardless of which of these platforms will win, it’s clear that there’s a lot more buzz in the low-end smartphone market than in the high-end device segment.

Component Manufacturers Are Set For The Low-End Explosion

Low-end smartphones are often the first connected devices consumers own. With 4G LTE becoming widely available even in emerging markets such as India, there’s a lot of focus to provide low-end devices with connectivity to faster networks.

  • Qualcomm’s biggest announcements recently hasn’t been how much firepower the new Snapdragon 810 is packing, but rather the specifications of its cheapest Snapdragon 210 SoC. The new chip has been designed specifically for sub $100 smartphones and features LTE connectivity.
  • Sony and Sharp, two big Japanese component manufacturers, are seeing a large chunk of their sales being driven by Chinese smartphone manufacturers. It’s no secret that companies like Xiaomi, Huawei and Lenovo are masters of the low-end market.
  • Chip-maker Mediatek is the odd one out, and is shifting focus to serving high-end devices. This could be due to Qualcomm’s extensive LTE related IP rights, making it less economical for Mediatek to produce low-end LTE chips.

Analysts Expect Low-End Devices To Dominate

Research firms like Gartner and IDC have already predicted that growth in the high-end smartphone market will slow, owing to the increasingly price competitive devices coming out of China.

  • Gartner suggests that 78% of global smartphone sales will come from developing countries as early as 2018, helping make the sub $100 smartphone segment the most dominant in the market.
  • Ericsson predicts there will be 6.1 billion smartphones in the world by 2020, up from the current figure of 2.7 billion. Moreover, smartphone sales are expected to eclipse dumb phone sales by 2016 and no where is this trend more pronounced than in India.

2015 will be the year of the sub $100 LTE smartphone

It may sound sudden, but given the pace of innovation in the low-end smartphone market, there’s no doubt it’s possible. Moreover, the progression to this point has been in the making for over 2 years.

  • 2013 was the year we saw Chinese smartphone vendors like Xiaomi, Lenovo, Oppo and Vivo unload a hoard of high-spec, low-cost devices in the market. While none of these devices fit the sub $100 bill, they did show us that cheap didn’t mean trash.
  • 2014 saw the focus shift from high-end to mid-range devices. Manufacturers like Motorola and Xiaomi set the stage with hugely popular devices that offered a great smartphone experience in the sub $200 price range.
  • The stage for 2015 being the year of the sub $100 smartphone is already set. Devices like the Moto E, Xiaomi Redmi and Android One already offer great user experiences for really little money. Taking this forward, the addition of LTE in the mix doesn’t really sound like much.

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