Don't be a midrange handset vendor, warns analyst

The strongest demand segments for handsets over the next five years will be for high-end and entry-level phones, says a new report from Juniper Research. The firm claims that these two bookends of the market are expected to account for nearly 80 per cent of all new mobile phones by 2014, or just over 1 billion units in total.

To this end, Juniper analyst Andrew Kitson believes that Apple, Nokia and BlackBerry maker RIM are well positioned to meet the strongest demands over this period, with the mid-range sector being dominated by LG and Samsung as they continue to see demand for these products in Latin America, Asia and parts of Europe.

However, Kitson claims the iPhone has changed the game for everyone, and that Motorola and Sony Ericsson might not be able to adapt sufficiently to survive.

"If a phone has wireless broadband, MP3/MP4 media players, touch-screen interfaces, etc., it's likely to do well. Hence, there have been so many iPhone emulators in recent months," said Kitson. However, he maintains that the growing acceptance of the iPhone and Blackberry among consumers have dealt blows to Motorola, which failed to innovate after its success with the ROKR and RAZR mid-tier lines.

The report states that low-cost handset shipments will number more than 700 million in 2014, up by 31 per cent from levels seen in 2008, albeit slightly down from a peak of 716 million in 2012, as some users begin to upgrade to costlier devices. "At the same time, smartphone shipment volumes will grow continuously across the forecast period, reaching almost 360 million by the end of the period. We therefore expect that midrange device sales volumes will fall by more than 41 per cent over the period," concluded Kitson.

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