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The IDC says that smartphone shipments should be more than 39 percent higher than those in 2012 by the close of this year with totals exceeding 1 billion units. By 2017, the number is expected to approach 1.7 billion units worldwide. The major culprit is a steady decline in average selling prices (ASPs).
This year, the IDC suggests that the average selling price of a smartphone will be just $337, a 12.8 percent decrease from $387 last year. With an ASP as low as $267 by 2017. The lower prices and accompanying carrier subsidies mean that many people who would otherwise have purchased a dumbphone are walking out of stores with smartphones.
“Particularly within emerging markets, where price sensitivity and elasticity are so important, prices will come down for smartphones to move beyond the urban elite and into the hands of mass market users,” says Ramon Llamas, IDC Mobile Phone team research manager. “Every vendor is closely eyeing how far down they can price their devices while still realizing a profit and offering a robust smartphone experience.”
With phone manufacturers fighting for the lowest price, how do you think companies are going to maintain profit margins? Let us know in the comments.