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Low-cost 4G phones set to unlock global market

Shipments of low cost 4G handsets improving rapidly, driving user migration toward 4G.

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Low cost 4G LTE smartphones and smart feature phones are key products in the global drive to connect the unconnected and facilitate 2G/3G user migration to more efficient networks in global markets. However, affordability for low-income segments remains a challenge that operators need to address. These are the findings of the Strategy Analytics’ Emerging Device Technologies report “Low Cost 4G Handsets: Market Dynamics and Opportunities”, which identifies a range of initiatives that developing market operators can pursue to improve migration from 2G and 3G and stimulate 4G adoption in new user segments.

“One of the most important trends taking place in the handset industry today is the rapidly falling price of 4G smartphones and feature phones,” comments Ken Hyers, Director at Strategy Analytics. “4G is taking a growing share of the feature phone and the ultra-low cost smartphone markets and by 2024 will account for one-third of feature phone and three-quarters of ultra-low-cost smartphone sales globally.”

India is a best practice market for 4G feature phones and their share is also growing in other Asia Pacific markets as an ultra-low cost alternative to smartphones. “The growing LTE feature phone ecosystem should help operators in other regions – such as Asia, Africa and Middle East, Latin America – to accelerate their 4G business too,” comments Ken Hyers. “There is strong ecosystem innovation in this space, with some operators working directly with vendors to deliver additional efficiencies in the handset supply chain and supporting device ODMs with framework agreements for low-cost handsets, and the adoption of KaiOS and preinstalled apps to increase the availability and experience of 4G smart feature phones to support the entry-level market.”

Accelerating 4G migration and adoption in developing markets will benefit both operators in terms of network efficiencies and spectrum re-farming, and benefit societies in breaking the digital divide and meeting the UN’s Sustainable Development Goals in areas such as universal health care, education, and finance. “Beyond initiatives to reduce 4G handset production costs, operators are increasingly working on improving overall affordability,” notes Phil Kendall, Director at Strategy Analytics. “Strategies can range from new distribution partnerships or identifying new subsidy sources such as OTT content providers or retailers to providing micro-loans for handset purchases to lower up-front costs or even lobbying governments for tax relief or ICT subsidies on entry-level handsets.”

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