Take a look at the smartphone you’re holding right now. Chances are, if you’re an Android or smartphone enthusiast, you’ll be holding a top-of-the-line device. You might even be reading this article on one right now. At the very least, it’s likely a mid-range smartphone or a top-end device from a year or two ago.
As much as 83% of smartphones sold in the U.S. in 2011 were priced at $250 and above. But according to a study by research firm Informa, this figure could drastically change. By 2017, entry-level smartphones will dominate the market. The analytics firm defined entry-level phones as those that cost $150 or less.
Informa says that by 2017, such device will take at least 50% of market share, while higher-end devices will dwindle to 33%.
Looking deeper into the analysis, we uncover a few trends:
Informa says that by 2017, the market will be split between high-end smartphones that will require carrier subsidy and contract, and cheaper, sub-$150 smartphones that users are likely to purchase outright and without a contract. We are actually seeing the start of this trend already, with low-cost carrier offerings from both established carriers and MVNOs, including Boost Mobile, MetroPCS and the like.
In terms of the negative implications, there’s the possibility that the smartphone experience will be diluted because of the dominance of cheap Android devices. If you’re not getting the full capabilities of your device, then you’re probably not enjoying the platform to the fullest, which explains the so-called Android engagement paradox.
Of course, mobile users outside of the U.S. — such as those in Europe and Asia — are likely to attest to this trend already, with the carrier pricing models in these regions vastly different from those in the U.S. Are Americans ready to ditch the contract and subsidy, and go prepaid instead?