ABI research says emerging mobile phone markets will see CAGR of 24% thru 2014

The world’s largest underserved markets for mobile communications are in developing nations and regions, such as Asia, Africa, and Latin America, but formidable barriers stand in the way. The low disposable income of most of the population is among the most immediate. Low cost and ultra-low cost handsets are seen as part of the solution to that problem, and according to a new study from ABI Research the two categories together will see a compound annual growth rate of 24% over the next five years. According to an industry analyst Michael Morgan, in 2013-2014 the top price for a ULCH phone will be no more than $15, which is feasible because some handset models are hitting that price today.

Other inducements fostering uptake of mobile services in emerging markets include value-added data services using locally relevant content. Besides, more enlightened attitudes among government regulators towards reducing taxes and tariffs on handsets and services can also help.

However, emerging markets do present significant challenges. For handset vendors, the low prices mean margins so thin that profitability demands major economies of scale. Vendors must also control a wide IP portfolio and manufacture locally to control royalty, import and labor costs. The research shows that on all these counts, Nokia is the out-and-out market leader.

“Entry level handsets must deliver high value to low-income emerging market consumers who want good quality at low cost,” concludes Morgan.