Smartphones’ prices are falling

 The study conducted recently shows that smartphones are getting cheaper as shipment volumes increase: in 2007 only 18% of smartphones available cost under US$200 retail compared with 27% this year. According to ABI Research forecasts 45% of the smartphones shipped 2014 will be priced below $200. This decrease in prices is connected with a rapid change in many consumers' attitudes and a corresponding shift in vendors' and mobile operators' sales and marketing strategies. ABI mobile devices practice director Kevin Burden explains that 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. As a result now more and more smartphones and conventional phones are priced similarly. The best way is when both groups of consumers are accommodated: those who want a basic replacement phone, and those who care about what the OS can do for them.

Sometimes these strategies are subsidized by the offers of mobile operators; sometimes smartphones are never subsidized because of their high-end concept, prestige items or manufacturer's design and innovation prowess. But manufacturers aspire 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. 

The final estimation of ABI Research show that the greatest increase in smartphone shipment volumes over the next five years will be found in the $100-200 price range while smartphone while continue being a substantial part of the mainstream handset market.