Low Cost Handsets & Entry Level Smartphones

Overview

This strategic report provides a detailed assessment of the low cost handset market analysing and forecasting for three handset categories, ultra-low cost handsets, low costs handsets and entry level smartphones.

Within two forecast chapters the number of handset shipments, installed base and the number of users are projected by eight key regions, for each of the three handset segments.  The report also identifies and forecasts the combination of low cost and ultra-low cost handsets.

The report investigates the new features on lower end devices, including, browsers, email and social networking facilities and includes strategic recommendations for players across each sub-sector.

Table of Contents

Executive Summary

1. The Low Cost Opportunity

1.1 Introduction   
1.1.1 Scope of the Report   
1.1.2 Demands on the Low Cost Handset   
1.1.3 Low Cost Devices Within the Overall Handset Market   
Figure 1.1 Devices and Pricing in the Handset Market   
1.1.4 Category Definitions   
Table 1.1: The Low Cost Device Universe 2010   
i. Ultra low Cost Handset   
ii. The Internet/Email-Enabled Handset (Low Cost Handset)   
iii. The Entry level smartphone   
1.2 Defining Low Cost   
1.2.1 Low Cost Markets   
i. Limited Penetration   
ii. Absence of Infrastructure   
iii. Prepaid Rules   
iv. Who Owns the Customer?   
1.2.2 Low Cost Handset Requirements   
i. Voice Functionality   
ii. SMS   
iii. Low Price-Point   
iv. Robust Design   
v. Limited Number of Components   
vi. Long Battery Life   
1.3 The Future of Low Cost Handset   
1.3.1 Enabling Basic Phones with the Mobile Browser   
Table 1.2: Features of Different Tiers of the Handset Market   
1.3.2 Critiques Levelled at the Low Cost Handset   
1.4 The SIM-Only Possibility   
1.4.1 Phone Sharing   
i. Grameen Foundations Village Phone Programme   
1.5 The Total Cost of Ownership Debate   
1.5.1 Nokia Study   
1.5.2 Lowering the Cost of Ownership   
1.5.2  Extending the Feature Set   
1.6 Conclusion

2. Low Cost Markets Drivers & Inhibitors

2.1 Introduction   
2.1.1 The Handset Industry in Context   
2.1.2 Emerging Market Trends Supporting the Low Cost Handset Market   
2.1.3 How the Low Cost Market has Changed   
Figure 2.1: Development of the Low Cost Handset Market   
2.2 New and Traditional Drivers   
2.2.1 Traditional Low Cost Handset Drivers   
2.2.2 ARPU   
Figure 2.2: Mobile ARPU ($) Split by 8 Key Regions 2010-2015   
Table 2.1: Mobile ARPUs ($) Split by 8 Key Regions 2010-2015   
2.3 Power Availability   
Figure 2.3: Coral-200-Solar   
2.3.1 Operator Strategies: Growth Through Acquisition   
2.3.2 Cost Savings   
2.3.3 Increase in Operators Revenues   
2.3.4 Increased Marketing Opportunities   
2.3.5 Increase in the Subscriber Base   
2.3.6 Reducing the Bill of Materials   
2.3.7 New Drivers   
i. Own-brand handset initiatives from operators are now commonplace   
ii. Local handset vendors have entered the market in force   
iii. The advent of the low cost Internet   
2.4 Inhibitors   
2.4.1 Traditional Inhibitors   
2.4.2 New   Inhibitors   
2.5 Market Enablers and Opportunities   
2.6 Geographical Overview of Low Cost Markets   
2.6.1 Africa   
Figure 2.4: African Mobile Penetration Rates 2008   
2.6.2 Indian   
Table 2.2: Leading Mobile Operators and their Owners   
Table 2.3: MTS Handset Portfolio   
Table 2.4: Selected Handsets Available in India   
2.7 Conclusion

3. Strategies & Players

3.1 Introduction   
3.2 Handset Strategies   
3.2.1 Low Cost and Ultra Low Cost Handsets Trends   
i. Local  Handset Manufacturers are Emerging   
ii. Operators are Developing Own-brand Strategies   
3.3 Overall Handset Trends   
3.3.1 The Challenges of Hardware Differentiation   
3.3.2 Commoditisation Brings Risks to Handset Suppliers   
3.3.3 Evolving the Strategy Beyond Hardware   
3.3.4 Incumbent Handset Vendor/ New Entrant Balance   
Figure 3.1 Traditional Versus new Local Players: The Balance   
3.4 The Market Players   
3.4.1 Nokia   
i. Nokia s Historic Low Cost Handset Initiatives   
ii. Focus on Services   
iii. Devices   
iv. Ovi   
v. Ovi Mail   
Table 3.1 Ovi Mail (October 2010)   
vi. Life Tools   
Table 3.2: Nokia Life Tools   
vii. Product Launches   
3.4.2 ZTE   
i. Emerging Market Emphasis   
3.4.3 Samsung   
i. Low Cost Devices   
3.4.4 Other Players   
i. LG Electronics   
ii. HTC   
3.4.5 Local Handset Players-China and India   
i. Qiao Xing Mobile   
ii. Micromax   
3.5 Operators   
3.5.1 Orange Group   
3.5.2 Vodafone   
Figure 3.2: Vodafone Ultra Low Cost Handset   
3.6 Local Operators Initiatives   
3.6.1 Zain   
3.7 Chipset and Software Manufacturers   
3.7.1 Broadcom   
3.7.2 Synchronica   
Figure 3.3: Synchronica s MessagePhone   
i. MessagePhone   
3.7.3 Opera   
3.7.4 Emerging Market Trends   
i. Russia and CIS   
ii. South East Asia   
iii. Africa   
iv. Latin America   
3.8 Conclusion

4. Entry Level Smartphones

4.1 Introduction   
4.2 Entry Level Smartphone Trends   
4.2.1 Developed Market Operators\\\\\\\' Own-Brand Strategies   
4.2.2 Developing Markets   
4.3 The Role of the Chipset       
4.4 Total Handsets Installed Base   
Figure 4.1: Handsets Installed Base (m) Split by 8 Key Regions 2010-2015   
Table 4.1: Handsets Installed Base (m) Split by 8 Key Regions 2010-2015   
4.5 The Smartphone Market   
4.5.1 Smartphones as a Proportion of the Mobile Handset Market   
Table 4.2: Percentage of New Handsets that are Smartphones Split by 8 Key Regions 2010-2015   
Figure 4.2: Annual Smartphone Shipments (m) Split by 8 Key Regions 2010-2015   
Table 4.3: Annual Smartphone Shipments (m) Split by 8 Key Regions 2010-2015   
4.5.2 The Entry Level Smartphone   
i. Characteristics   
Table 4.4: Entry Level Smartphone Handsets Launched in 2010   
4.6 Entry Level Smartphone Market Developments   
4.6.1 Operator Initiatives   
i. Orange   
Figure 4.3: Orange San Francisco   
ii. Vodafone   
4.6.2 India\\\\\\\'s Smartphone Market   
4.7 Entry Level Smartphone Shipments   
Table 4.5: Average Price of Entry Level Smartphones (end of year) 2010-2015   
4.7.1 Methodology   
Figure 4.4: Methodology for Entry Level Smartphone Forecasts   
Figure 4.5: Number of Entry Level Smartphones (m) Shipped Split by 8 Key Regions 2010-2015   
Table 4.6: Number of Entry Level Smartphones (m) Shipped Split by 8 Key Regions 2010-2015   
Figure 4.6: Entry Level Smartphones Installed Base (m) Split by 8 Key Regions 2010-2015   
Table 4.7: Entry Level Smartphones Installed Base (m) Split by 8 Key Regions 2010-2015   
4.8 Conclusion   

5. Market Forecasts for Entry Level Devices

5.1 Introduction   
5.1.1 Global Low Cost Mobile Device Shipment Forecasts   
5.1.2 Availability of Prepaid Services   
Table 5.1: Proportion of Prepaid Mobile Subscribers as Percentage of Overall Subscriber Base (%) Split by 8 Key Regions 2010-2015   
5.2 Low Cost Handsets   
5.2.1 Characteristics   
Figure 5.1: Entry Level Handsets Forecast Methodology   
5.2.2 Shipments   
Figure 5.2: Annual Low Cost Handset Shipments (m) Split by 8 Key Regions 2010-2015   
Table 5.2: Annual Low Cost Handset Shipments (m) Split by 8 Key Regions 2010-2015   
5.2.3 Installed Base   
Figure 5.3: Installed Base (m) Low Cost Handsets Split by 8 Key Regions 2010-2015   
Table 5.3: Installed Base (m) Low Cost Handsets Split by 8 Key Regions 2010-2015   
5.2.4 Market Value   
Figure 5.4: Market Values ($m) of Global Low Cost Handset Shipments Split by 8 Key Regions 2010-2015   
Table 5.4: Market Values ($m) of Global Low Handset Cost Shipments Split by 8 Key Regions 2010-2015   
5.3 Ultra-Low Cost Handsets   
5.3.1 Characteristics   
5.3.2 Shipments   
Figure 5.5: Annual Ultra Low Cost Handset Shipments (m) Split by 8 Key Regions 2010-2015   
Table 5.5: Annual Ultra Low Cost Handset Shipments (m) Split by 8 Key Regions 2010-2015   
5.3.3 Installed Base   
Figure 5.6: Installed Base (m) Ultra Low Cost Handsets Split by 8 Key Regions 2010-2015   
Table 5.6: Installed Base (m) Ultra Low Cost Handsets Split by 8 Key Regions 2010-2015   
5.3.4 Market Value   
Figure 5.7: Market Value ($m) of Global Ultra Low Cost Handset Shipments Split by 8 Key Regions 2010-2015   
Table 5.7: Market Value ($m) of Global Ultra Low Cost Handset Shipments Split by 8 Key Regions 2010-2015   
5.4 Entry Level Handsets Forecasts   
5.4.1 Shipments   
Figure 5.8: Annual Entry Level Handset Shipments (m) Split by 8 Key Regions 2010-2015   
Table 5.8: Annual Entry Level Handset Shipments (m) Split by 8 Key Regions 2010-2015   
5.4.2 Installed Base   
Figure 5.9: Installed Base (m) Entry Level Handsets Split by 8 Key Regions 2010-2015   
Table 5.9: Installed Base (m) Entry Level Handsets Split by 8 Key Regions 2010-2015   
5.4.3 Market Value   
Figure 5.10: Market Value ($m) of Global Entry Level Handset Shipments Split by 8 Key Regions 2010-2015   
Table 5.10: Market Value ($m) of Global Entry Level Handset Shipments Split by 8 Key Regions 2010-2015   
5.5 Conclusion   

Glossary

Companies Referenced

Bharti Airtel, Broadcom, HTC, LG Electronics, Micromax, MTN, Nokia, Orange Group, Ovi, Qiao Xing Mobile, Samsung, Synchronica, Telefonica, Vodafone, Zain, ZTE