Smartphone average selling prices are falling drastically

November, 29th 2013

Dubai: The average selling prices of smartphones are going down across the globe as Android has enabled a number of new manufacturers to enter the market, supported by a variety of turnkey processing solutions.

Many of the unbranded handset vendors have focused on low-cost devices as a way to build brand awareness.

"Everyone wants a cheaper smartphone right now. In Africa, there are many local brands which are selling smartphones for $100 [Dh367] and sell more phones than Samsung and Nokia. The prices are expected to fall drastically," Hamza Saleem, senior research analyst at research firm International Data Corporation (IDC), told Gulf News.

IDC expects global smartphone average selling prices (ASPs) to be $337 this year, down 12.8 per cent from $387 in 2012. This trend will continue in the years to come and IDC expects smartphone ASPs to gradually drop to $265 by 2017.

In the Middle East and Africa, the ASPs of smartphones are expected to be $338 in 2013 while it was $336 in 2012.

High-end models

This year, Saleem said that a lot of brands have launched many high-end models and pushed into the markets very quickly and did not launch any mid- to low-end models. So consumers are forced to buy high-end models this year.

In 2014, the ASPs are going to be $312 and $281 in 2015.

Saleem said the key driver behind smartphone volumes in the years ahead is the expected decrease in prices.

"As smartphones become more and more mass marketed, the prices will come down and that is the trend. The smartphone boom was fuelled by the premium models but now as connectivity of data becomes more prevalent; more people are going to use smartphones to access data," said Nadeem Khanzadah, head of retail at Jumbo Electronics.

However, he said the price erosion will be offset by selling more smartphones.

He said major vendors have kept their premium models almost in the same range as their pervious ones. Even Apple has kept the prices of iPhone 5S at the same price as the iPhone 5.

Total sales

"The demand for smartphones has been good in the last couple of months and this is going to continue," he said. Saleem said the total phones expected to be sold this year will be 220 million, out of which 57.6 million are smartphones. Last year 40 million smartphones were sold out of 218 million handsets. In 2014, smartphones are going to be around 65 million out of 231 million handsets.

The region will contribute 5.7 per cent to the global smartphone sales this year. Globally, smartphone shipments are expected to cross one billion units this year and approach 1.7 billion units by 2017.

Source: Gulfnews.com