HomeNews70 per cent mobiles globally will cost less than Rs 4500

70 per cent mobiles globally will cost less than Rs 4500

The demand for new handset is set to grow to 2.58 billion units a year, driven by replacement market which will contribute 94 percent of this growth.

The rise of India and China and other emerging countries is changing the economic landscape if the world and mobile phone industry is no different.

According to Evalueserve, a company in business research domain, the global average selling price (ASP) for approximately 70 per cent (4.8 billion) of active mobile phones will fall under USD 100 (RS 4500) by 2015.

This can be attributed to the increased competition among manufacturers and focus of manufacturers on lower-middle income countries such as China and India that are cost-sensitive, but volume heavy.

Evalueserve estimates the global handset demand to rise to approximately 2.58 billion in 2015, with the replacement market accounting for approximately 94 per cent of the gross demand.

“This change in buying behaviour will be driven by two factors: rapid commoditisation of the mobile handset with progressively reducing price points, and higher tendency to switch handsets, particularly in the mass-market segment due to the low switching cost”, said Nitin Navish Gupta, assistant vice president, information, communication and technology practice, Evalueserve.

Nokia, the largest mobile manufacturer, recorded an approximately 39 per cent fall in its ASP between 2005 and 2009. Similarly, Samsung’s ASP for mobile phones declined approximately 33 per cent over the same period.

With the declining subscriber additions, the demand for replacement handsets is expected to become the key driver for the mobile market. Evalueserve estimates the share of handset replacement demand to the overall handset demand to increase from 73 per cent (1.46 billion) in 2010 to 94 per cent (2.43 billion) in 2015. Over the same period, handset demand is expected to increase from 2.0 billion in 2010 to 2.58 billion by 2015.

The research says that manufacturers are likely to churn out handset models faster than before, which will mean they will need to experiment more.

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