The Smartphone Industry Shifting its Target from High-end to Low-end

21 Feb

Smartphones have been all the rage since last year. In 2010, after major smartphone manufacturers around the world released their own high-end smartphones, the market share of high-end smartphones has settled. Therefore, several smartphone manufacturers and telecoms, such as Chunghwa Telecom, have shifted target to the low-end smartphone market, which results in a war breaking out among mobile chip manufacturers. It is believed that whatever company conquers the low-end smartphone market will see the route to victory in the second round of smartphone war.
2010 was a fruitful year for manufacturers such as Apple, HTC, and Samsung regarding sales revenues. Other manufacturers such as Motorola, Nokia, LG, Sony Ericsson, Acer, and Asus have also launched their high-end mobile products, in which the percentage of high-end smartphones outweighs low-end ones’. Therefore, mobile chip manufacturers, aiming at the potential of mid-end and low-end smartphone market, begin to develop relevant products. Telecom companies also plan to market packages for low-end smartphones.

Chunghwa Telecom expects this smartphone fever to continue in 2011, and with a huge demand, iPhone is expected to exceed its 2010 sales numbers. Despited of popularity of high-end smartphones, it is hard to overlook the potential demand for low-end smartphone. Should the basic 3G mobile infrastructure be strengthened and prevalence be increased in China and India, it may generate new users and increase demand in low-end smartphone market. A demand of at least 400 million smartphones is expected in 2011.

According to Commercial Times, major mobile chip manufacturers such as Qualcomm, Broadcoom and MTK will be focusing on low-end Android platform: Qualcomm’s 3G low-end Android platform and end-market products are on the verge of being launched, and MTK plans to upgrade low-end Android platform from 2.75G to 3.5G in 2Q11. In addition, Broadcom, the current leader in Wifi, Bluetooth and several other areas, has been deliberately working its way into the wireless communication field. Not only did Broadcom, in 4Q10, organize three large-scale mergers, but also announce its new dual-card and dual-standby Android smartphone solutions in last December. It is estimated that Broadcom’s low-end smartphones with new chips will be officially unveiled in the Mobile World Congress in February this year.

Simultaneously, telecoms have noticed this potential market. Chunghwa Telecom recently points out that currently the high-end smartphones market is about to reach saturation; the demand in low-end market is what we should be focusing on in 2011. Owning roughly 30% to 40% mobile phone users in Taiwan, Chunghwa telecom decides to switch part of its focus to mid-end and low-end market in 2011 and plans to market low-end smartphones with the most economical monthly rental fee package, aiming for a breakthrough into the low-end market.

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