In 2009, 27% of Smartphones Cost under $200, ABI Research Finds

NEW YORK--(Business Wire)--
Smartphone prices are falling as shipment volumes increase, and a new study from
ABI Research finds that while in 2007 only 18% of smartphones on offer cost
under $200 retail, that percentage has already grown to 27% this year. By 2014,
say the firm`s forecasts, 45% of the smartphones shipped that year will be
priced below $200.

These numbers highlight a rapid change in many consumers` attitudes about
smartphones, and a corresponding shift in vendors` and mobile operators` sales
and marketing strategies.

"Manufacturers see consumers increasingly demanding smartphones, because of
their better understanding of the value that a smartphone delivers," says mobile
devices practice director Kevin Burden. "Nearly all consumers used to choose
handsets based on the physical characteristics of the hardware, not the software
inside. The iPhone changed that: more users are now shopping for their handset
based on the operating system and software, which is something once thought to
be very unlikely."

The result: more and more smartphones and conventional phones are priced in
similar ranges. Handset makers` and carriers` marketing strategies must
accommodate both groups of consumers: those who want a basic replacement phone,
and those who care about what the OS can do for them. In some markets, these
strategies are further complicated by the heavy subsidies that mobile operators
may offer.

Some smartphones are never subsidized: the high-end concept phones intended as
prestige items or to demonstrate a manufacturer`s design and innovation prowess.
But increasingly, manufacturers want to offer a mix: some high-priced,
high-margin models, but also a generous helping of moderately-priced smartphones
that can generate high volumes of sales. According to ABI Research, by far the
greatest increase in smartphone shipment volumes over the next five years will
be found in the $100-200 price range.

"Prices will hold at a certain point," notes Burden. "We may never see a $30
smartphone. But over time, smartphones will take a substantial part of the
mainstream handset market."

ABI Research`s new "Smartphone and OS Markets"
(http://www.abiresearch.com/research/1003736) analyzes the regional markets for
smartphones, the outlook for the competing high-level operating platforms, and
how the smartphone segment will further segment within itself.

It is a component of the Mobile Devices Research Service
(http://www.abiresearch.com/products/service/Mobile_Devices_Research_Service).

ABI Research provides in-depth analysis and quantitative forecasting of emerging
trends in global connectivity. From offices in North America, Europe and Asia,
ABI Research`s worldwide team of experts advise thousands of decision makers
through 27 research and advisory services. Est. 1990. For more information visit
www.abiresearch.com, or call +1.516.624.2500.

ABI Research
Christine Gallen, +1-516-624-2542
pr@abiresearch.com

Copyright Business Wire 2009