Low-Cost Android Smartphones to Capture 80% of Market in Africa, India, and China

Analysts See Android as Viable OS for Low-Cost Smartphones

by Anton Shilov
02/19/2012 | 11:56 PM

The Android OS has taken the smartphone world by storm. In just two years, Android has become the top smartphone OS worldwide. In the US, Android reached #1 in smartphone OS sales because wireless operators that did not carry Apple iPhone chose Android as their smartphone solution. Now, Android is on-track to address the emerging markets.

 

The Android handsets that are selling well in the U.S. and Europe are not the same low-cost Android handsets selling elsewhere in the world. New In-Stat research forecasts that low-cost Android handsets will reach a penetration rate of 80% of total smartphones in Africa, India, and China by 2015.

"All-in-all, the way that Android has spread worldwide, low-cost Android will also spread worldwide. But, where most Android phones are being sold in developed regions of the world, low-cost Android will flourish in emerging areas; however, it will face heavy competition in some regions,” says Allen Nogee, a research director at In-Stat.

The low-cost Android smartphone segment is comprised primarily of smartphones released with Android 2.2 or 2.3, since these versions are a good blend of features with modest memory and processor usage. The low-end low-cost smartphones generally stick with EDGE and processors running at 600MHz or lower, because a single-core EDGE chip sells for well under $10. For our purposes, low-cost means smartphones that are $150 or less. Smaller phone manufacturers will sometimes purchase from the “gray market” where component manufacturers typically don't pay licensing fees, royalties, or taxes for the products they produce. Early competitors in the market include Huawei, MicroMax, Motorola, Samsung, Spice, and ZTE.

“Samsung has bada, and Nokia is developing Meltemi. In addition, Microsoft has stated that it wants to sell Windows Phone in these developing regions as well and could aggressively lower prices  to gain market share. While Google profits in these regions from advertising revenue, Nokia and Samsung benefit the old-fashioned way, by selling hardware,” added Mr. Nogee.

According to In-Stat, unit shipments for low-cost Android smartphones will approach 340 million worldwide in 2015. The low-cost Android handset segment will cause some fragmentation in the Android platform, but this is not considered as a major drawback by manufacturers of inexpensive handsets.