Worldwide smartphone shipment will reach 1.7 billion units in 2017, driven by growth from emerging markets especially China.
In a statement Monday, analyst firm Ovum said emerging markets last year accounted for 160 million of 450 million smartphones sold worldwide. China accounted for about 66 percent of smartphones sold in developing markets, it added.
Shiv Putcha, Ovum principal analyst for telecoms emerging markets, said: "China is at the center of smartphone development and adoption in emerging markets, with the whole ecosystem increasingly geared toward the production of feature-rich affordable devices. This new wave of affordable smartphones will have a major impact on consumer choice in emerging markets."
Despite the emergence of cheaper entry-level devices with a sub-US$100 price tag, Ovum noted that smartphone affordability remains a big issue in most emerging markets. "Operator subsidies for smartphones are uncommon in emerging markets and this has hampered smartphone adoption," it added.
Thus major chipset and platform vendors such as Mediatek and Qualcomm have a significant impact on both smartphone availability and affordability, as they offer reference designs to their device OEM (original equipment manufacturer) partners and reduce barriers to entry.
Putcha said: "While much of this development is occurring in China, local brands from other emerging markets are also adopting this model. Other emerging markets that will show strong growth include India and Indonesia, followed by Brazil and Russia."
Chinese Internet players extend footprint with phones
Market players, including Baidu and Alibaba, are aiming to leverage the opportunity smartphones offer to extend their online services, the report said.
While almost all of these players are using Google Android, some are further customizing the mobile operating system to offer their own user interfaces, icons and services, "essentially replacing Google in the process", it said.
Putcha added the growth of smartphones in emerging markets will see a corresponding growth in online services such as cloud, storage, and purchasing based on mobile money transactions, while OEMs and equipment vendors will also increase their presence in online services.
However, mobile operators looking to profit from growth of low-cost smartphones in emerging markets with white-labeled devices will struggle to gain traction, he added.