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Inexpensive Smartphones Will Become the Smartest Choice in 2011

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After a disastrous 2009, and a noteworthy recovery in 2010, the global handset market will grow roughly 8 percent in total handset unit sell through in 2011, resulting in more than 1.4 billion devices sold. Basic ultra low cost handsets, inexpensive smartphones, and Android based devices will see the most demand in 2011, according to a new report from Pyramid Research.

In 2011-2015, 70 percent of new handsets sales will be derived from emerging markets.

"The demand in these markets will remain skewed toward very basic, ultra-low cost handsets in 2011 and, given the size of these markets, their preferences will dictate the global demand trends, too," says Stela Bokun, Senior Analyst at Pyramid Research. Pyramid expects that some demand for inexpensive basic models will come from the developed markets, too. "The underpenetrated market segments in these countries are children and seniors. On average these users seem to opt for the simplest cell phone models, which often offer only text messaging within its data functions," notes Bokun.

While smartphones have seen a skyrocketing demand in developed markets in 2010, Pyramid projects even stronger demand for these handsets in emerging markets going forward. "The demand for low-cost smartphones in these regions has been on the rise in the second half of 2010, and will culminate in 2011," indicates Bokun. The growing popularity of Android OS will be one of the drivers of this trend. "The expansion of Android, typically associated with more inexpensive smartphones, will be particularly pronounced in the Latin American and Asia/Pacific markets, which are characterized by high price elasticity due to their lower average income levels," according to Bokun.

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