The top and bottom ends of the wireless handset markets are to enjoy the best growth rates over the next five years, according to researchers.
This will be at the expense of mid-range models, commonly called “enhanced” phones. The enhanced phone sector is currently the largest in terms of shipments, with 854 million units shipped in 2007.
But it will be overtaken by both other classes in 2013, with just 441 million shipping.
Kevin Burden, a director of ABI Research and author of the report “Mobile devices annual market overview”, said: “As we see more user sophistication and demand for high-end features, handset manufacturers will continue to push functions of high-level smartphone operating systems further down their product lines.
“Their smartphone portfolios will grow, and with them, the entire smartphone market.”
The report said this was seen as desireable by operators as well, who wanted more smartphone users because of the higher average revenue per user (ARPU) they generated.
It added that the operators also like phones with standard operating systems that are optimised for their content delivery platforms.
At the other end of the market, demand will be driven by the huge emerging markets in countries such as China, India, and Brazil.
Here, the ABI report said the low-cost and ultra-low-cost handset categories were set to become the largest classes of mobile phones by 2013 in terms of shipments, though not in terms of revenue.
“While the unit shipments of ultra-low-cost handsets will be dramatic over the forecast period, the device class is only expected to account for 6 per cent of the market’s overall revenue,” said Burden.
“But vendors will continue to pursue these markets for the sake of brand-building and the prospect of eventual upward migration by users.”
Since no single mobile device will serve the needs of everyone, a number of other form factors will compete for users’ mobile computing cycles.
In particular, MIDs (Mobile Internet Devices) and UMPCs (Ultra-mobile PCs) show promise for wider consumer acceptance.
According to the ABI report, prices will be moderate (eventually under US$200 for many MIDs) and the devices wiill deliver a superior mobile Internet experience.

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