Market Insight

Not-As-Smart Phones to Drive Sales and Data Revenue

While an open OS and full developer support might be an essential element for the success of an OS ecosystem in the mid to high-end smartphone market, the low-end market may see success with alternative operating system architectures. Such handsets could help OEMs expand their shipment market share in an area currently dominated by Apple’s iPhone by providing options to budget-conscious consumers. Samsung has identified this opportunity and is paving the way with its “Wave” series of smartphones that will seek to penetrate the low-end market using their own Bada operating system.

The iPhone is currently the leader in smartphone shipments, with an 18.7% market share. To effectively compete with Apple, OEMs could take advantage of the low-end smartphone market, an area Apple has yet to penetrate. Low-end smartphones could allow “smart” functionality such as email, web browsing, pictures, video, social networking or possibly some level of applications with limited or no access to a full-fledged apps store. While these functions initially required an open operating system and full developer attention, the use cases utilizing these functions have matured to the point where they can easily be implemented in a real time or closed operating system. Furthermore, by not promising access to a plethora of apps, OEMs can diminish the open aspect of the OS, focusing instead on providing several key functions and built in applications at a low cost to consumers. In turn, this would permit OEMs to optimize their hardware to better suit a less resource-intensive OS, thus allowing for bill of material cost savings which can be passed on to the consumer.

With data generating up to 35% of the total revenue for some mobile operators, it is clear that wireless carriers will seek ways to increase the number of smartphones on their systems.  Lowering the entry-price to this market will be key to expanding smartphone sales and data revenue.

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