Cheaper smartphones are becoming more popular, according to analysts

Cheaper smartphones are becoming more popular, according to analysts
For years now, smartphones have fallen in two general categories – the "cheaper" products, suitable for more basic use and look and feel like plastic toys, and the "upper midrange" to "premium" class, with stronger hardware and better build materials and quality. However, in recent past, the line between these categories has been getting thinner and thinner – hardware has gotten so good that ~$300 smartphones can hold their own just fine in heavy daily tasks, and young companies who sacrifice a large part of their earnings just to grab a small piece of the market have brought "premium materials" to the lower-tier smartphones. This has, in turn, forced even large and establishes companies like Samsung to re-think how they go about their affordable handsets, and the metal-clad Galaxy A series is a good example of that.

According to market analyst company Counterpoint Research, major smartphone manufacturers have increased the selection of affordable handsets in their portfolios in order to meet a growing market demand for cheaper smartphones. It is reported that Samsung's sub-$300 smartphones made up for 40% of the company's handset models in 2014, but the number has risen to 54% by the first quarter of this year. Sammy phones priced below the $200 threshold have also increased, from 10% in 2014, to 41% in May this year.

LG's portfolio is also reported to be 65% comprised of sub-$300 models, although that was also the case back in 2014 and 2015. Apple, on the other hand, is said to be shipping noticeably more “inexpensive” devices this year. Of course, in the case of iPhones, the analyst considers devices under the $500 line to be the more affordable ones. Up until last year, just 10% of Apple's smartphones fell below this price point, this year, however, the ratio is up to 30%. This is, of course, thanks to the new iPhone SE and its 16 GB and 64GB variants, which are priced at $399 and $499 respectively.

While global smartphone growth went flat in the first quarter of this year, with almost every manufacturer seeing a year-over-year decline in shipments, it seems that there is an observable shift within the market. New smartphone users from developing markets are still unable to afford the top-tier gadgets, while many Western users are realizing that they can have a handset that meets their needs without spending top dollar for it.

This in no way means that top-tier handsets are irrelevant. In fact, in a few days, Samsung will be announcing its Q2 report, and analysts expect it to be the company's best quarter for the last two years, largely thanks to the premium Galaxy S7 and Galaxy S7 edge.

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27 Comments

1. HugoBarraCyanogenmod

Posts: 1412; Member since: Jul 06, 2014

This has proven iPhone SE sells because of PRICE not SCREEN SIZE! No one will entertain 4inch device unless something can be compromise, denials can deny but the articles here has finally stated fact.

2. Barney_stinson

Posts: 672; Member since: May 30, 2016

Yup! Thats a fact and another fact is-- the persons who likes to show off the IPHONE! They also bought SE coz not screen just the price!! . Btw XIAOMI have a great chance with their MIUI8 and MI note 2 !!

24. sgodsell

Posts: 7209; Member since: Mar 16, 2013

Considering the iPhone SE only came out in March of this year. Then we certainly haven't been influenced by its sales yet. Especially when it was launched, there was nobody lining up for the iPhone SE. Most of the smartphones that have been well under $400 for a few years now, and it continues to grow. There is a ton of smartphones now that offer great specs for great prices.

6. PenTiltoKet

Posts: 552; Member since: May 18, 2016

The irony of iphone user is, they were too isssheeepp.... They fight to death of 4" screen size just because their master told them so, and when apple finnaly cave in to the market demand, they were bought the 4.7" & 5.5" phone they were once said too big and ridiculous. Now, the new era of phablet with screen size of 6", 6.4", 6.6" & 6.8" come. They all come here to ridicule it. Say it too big, why don't you use tablet instead, and so on. I BET when apple introduce phone that big, they will droll.

14. libra89

Posts: 2271; Member since: Apr 15, 2016

For some, yes, but for others, it's the combination. To finally have a small phone with great specs is awesome!

19. Leo_MC

Posts: 7204; Member since: Dec 02, 2011

A NORMAL sized phone

23. phonearenarocks

Posts: 606; Member since: Mar 26, 2015

Why do you need great specs for a small phone anyway, you are not going to play games or watch videos in it, if you did in the past, you are making damage to your own eyes.

27. PenTiltoKet

Posts: 552; Member since: May 18, 2016

Agree with you. I don't think those who play games or watch video prefer small phone. So, that's why small phone have sh**y specs.

22. skyline88

Posts: 697; Member since: Jul 15, 2013

i'd rather use the a cheapo Huawei or Asus mid range than the stupid SE.

3. NoToFanboys

Posts: 3231; Member since: Oct 03, 2015

Smartphone specs were enough 2 years ago. Old flagships or new mid-range smartphones are enough for most users.

16. poptart574

Posts: 223; Member since: Feb 29, 2016

Absolutely. The Oppo find 7 is a two year old phone thats still a viable phone for anyone to use. So is the Vivo xplay 3s. A phone announced three years ago that still has specs/performance that rival many of the phones today

17. Acdc1a

Posts: 473; Member since: Jan 21, 2016

That and the fact that carriers, at least in the United States, have started to make the costs involved apparent to the end user. No one really wants to be tied to a $25 (or more) monthly payment for something they really don't need.

4. tedkord

Posts: 17311; Member since: Jun 17, 2009

Not surprising. Mid range smartphones are more than powerful enough today, and differences in "build quality" from the top tier are minimal to non-existent. The irony is that so called "premium" materials are actually worse choices for phone build. They add weight, block signal and are more bendable/breakable than good old plastic.

5. TheOracle1

Posts: 2213; Member since: May 04, 2015

Buyers in developing countries may be driving the growth but buyers in developed markets are also getting wiser. There's very little a $300 phone can't do.

11. ibend

Posts: 6747; Member since: Sep 30, 2014

yeah right, SD616 and SD650 is pretty much capable to run any apps smoothly, and most of those sub $300 phone have past-flagship feature, like FPscanner, NFC, IRblaster and others.. but some people choose to pay $600+ for one or two of these thing: - slightly better camera - slightly sharper screen - edge screen - iris scanner - stylus - dual camera - water-resistant - shatter-resistant - a few seconds faster apps loading (or just because brand, lol) btw, I'm still waiting for Note7 :D

7. pagal

Posts: 49; Member since: Jul 04, 2016

In future, no one is going to give 200$ for 48(64-16)gb for is**ts.

8. Moose

Posts: 418; Member since: Jan 05, 2015

Many of the lower priced phones offered by Sony, Samsung and LG, so far, have had very poor specs and, as such can't compete with similarly low priced Chinese phones that often have higher specs.

9. Martineverest

Posts: 521; Member since: Oct 27, 2015

This was how tablet decline started.....android oems have decided to increase their specs to a useless state( 6-8GB RAM),well as ppl are comfortable with 2-3 GB RAM.it will soon get to a state whereby nobody would want to spend more than $200 on a phone.thus,leaving iphones and surface phone as d only high end

12. tedkord

Posts: 17311; Member since: Jun 17, 2009

There's nothing useless about more ram, especially in a multitasking OS. Android flagships will remain high end and will continue to sell well. WP might be discontinued before any Surface phone surfaces.

20. Leo_MC

Posts: 7204; Member since: Dec 02, 2011

There's a limit to usefulness. Past that, there are too much money, spent for too little benefits.

10. Papa_Ji

Posts: 838; Member since: Jun 27, 2016

No SE is sold only due to apple logo on its back..... All smartphone vendors can maintain and even increase their sales without there logo or brand name on there devices exept Apple. Apple product are not sold for features, camera, screen size...etc... These are only sold for logo.

13. tedkord

Posts: 17311; Member since: Jun 17, 2009

That's silly. They may not be the absolute top of the line, but iPhones are great performers, and they have a solid ecosystem with good ease of use. That drives sales as much as anything.

15. kiko007

Posts: 7493; Member since: Feb 17, 2016

Was going to post something similar, but you beat me to the punch. +1

18. TheOracle1

Posts: 2213; Member since: May 04, 2015

An ecosystem that they make as difficult as possible to leave. There's a reason rooting in Android is called Jailbreaking in IOS.

21. Leo_MC

Posts: 7204; Member since: Dec 02, 2011

I bought Apple products not because of the specs (you never know what type of processor is that i7, what kind of SSD etc) but because of WHAT I CAN DO WITH THEM. I don't care if a phone has a 20 MP s**tty camera or has a 99 core soc, if it can't keep up with me. Fortunately, I have used some of this year Android flagships and I am so glad to see they are so close to the experience one gets on the iPhone that I think I will think twice if, in 1 or 2 years, I want to upgrade my 5s to an iPhone or to a normal sized cheap Android device (if I find one).

25. kenaldinho4444

Posts: 66; Member since: Jun 05, 2015

Most people who have bought a low-end and mid-range phone has never used a high-end smartphone before, once you experienced a high-end smartphone there's no going back

26. Chuck007

Posts: 1410; Member since: Mar 02, 2014

It used to be how value devices had vastly subpar cameras. Now that mid-tier phones have relatively good sensors with OIS, the average user wouldn't require an expensive flagship to take decent photos. As for the SOC, let's face it. No matter how fast it is and how much it's GPU can handle graphics like an Xbox 360, no game will require such horsepower for some time to come. Heck, even a S652 is attiquite for a smooth Android experience.

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