Cheap handsets in India and China fuel huge global surge in smartphone shipments

New figures show that global smartphone shipments for 2014 are set to be 19 percent higher than the previous year. Juniper Research reports that handset shipments are forecast to jump from 985 million in 2013 to 1.2 billion this year.

Smartphone popularity continues to rise, and this has been driven -- at least in part -- by the appearance of handsets with bargain basement prices. While the likes of Apple push premium-priced smartphones, emerging markets are lapping up handsets priced at $150 and under.

In fact, Juniper Research singled out two categories of smartphones that are responsible for rocketing sales. "Low-cost Economy" handsets are identified as those costing $75-150, while "Ultra Economy" devices are those priced under $75. Handsets at these prices are available around the world, but it is in emerging markets where the cheaper price points are proving particularly appealing. Chinese manufacturer Xiaomi is singled out for particular attention for its aggressive pricing in India and China, putting up competition for market-leaders Apple and Samsung.

These two manufacturers still account for 45 percent of global handset shipments, despite the higher prices. The established popularity of higher-priced handsets looks set to be diluted by success in emerging markets. Analysts suggest that by 2019 the average price of smartphones will drop to $274. Considering the fact that some handsets are currently nudging towards $1,000, it's clear that cheaper smartphones are going to become increasingly significant.

The shape of the smartphone market is changing rapidly. The report also suggests that sales are starting to stagnate in more established markets as smartphone uptake reaches saturation point. By the end of 2014 it is expected that Far East & China, Indian Subcontinent, Latin America, and Africa and Middle East are likely to account for more than half of smartphone shipments. It's unlikely that Apple and Samsung will produce handsets to compete in the cheaper end of the market, and it's probable that the two-tier pricing will continue around the world. Whether the cheaper manufacturers can expand into more established markets and steal some of the big players' thunder remains to be seen.

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