As more and more consumers worldwide move towards smartphones over basic feature phones, that will cause a major ripple effect throughout the supply chain.
Today's latest forecast concerns memory suppliers, in particular. Market intelligence firm IHS iSuppli is projecting that smartphones will surpass feature phones when it comes to NAND flash memory usage as soon as next year.
Analysts asserted that this is notable for a few reasons. For starters, this is the first time this has ever happened.
Additionally, this is a bit of a mixed bag because not only is the transition likely permanent, analysts also predicted that feature phones will still account for a "substantial portion" of flash memory shipments, with a projection of more than 500 million units each year through 2016.
Ryan Chien, an analyst covering memory and storage at IHS, noted in the report that flash memory densities continue to rise but the costs are decreasing at the same time, making it more affordable to integrate more memory on both segments of mobile phones:
Because feature phones this year will remain the largest segment of the global mobile handset market, they will continue to consume the largest amount of flash memory of any single type of phone. However, a permanent reversal will ensue next year as smartphones overtake feature phones in total units and flash memory shipments. This illustrates the rising influence of smartphones within technology markets.
But don't count feature phones out. As aforementioned, these cheaper handsets will still be around for quite awhile. The most obvious reason why is money as these devices are cheaper for both manufacturers and consumers.
IHS researchers posited this frames feature phones as ideal for attracting customers in developing markets around the world.
Furthermore, IHS analysts went so far as to suggest that feature phones could be the saving grace for some of the mobile OEMs that haven't been able to stay competitive in the current smartphone market -- namely Research In Motion and Nokia.
While products from both companies have lost their luster in the high-end handset spectrum, the historical success of the two firms could position them for continued popularity in the emerging markets via the future products they release, especially as consumers there enjoy increased purchasing power over time.
Nokia, in particular, is well-suited for developing markets: its phone prices have dropped 50 percent since 2007, during which time Samsung’s prices jumped by nearly the same margin of 50 percent.