ASPs to get crunched as smartphone market splits in two

Entry level "smart-enough" devices to create slipstream market, analyst claims

The smartphone market is set to split in two over the coming months as entry-level devices from the likes of Huawei and ZTE drive down average selling prices.

Figures from Infonetics Research show the global smartphone market was down three per cent sequentially in 2012's first quarter, with revenue standing at $45.9bn (£29.5bn). The research firm expects the market to be worth an annual $237bn by 2016.

Apple continues to hold a healthy lead as the smartphone world's biggest vendor, accounting for 45.7 per cent of total market revenue in Q1. But Android is gaining market share in unit terms, with the operating system hitting an all-time high of 57 per cent of shipments during the year's opening three months.

Samsung is in a comfortable position as the market's second-biggest hardware vendor by quarterly sales, some way ahead of RIM, Nokia and HTC. Richard Webb, Infonetics' directing analyst for microwave, mobile offload and mobile broadband, predicted that two parallel markets will begin to emerge next year.

"We expect to see some segmentation in the smartphone market in the next 12 to 24 months between high-end ultra-smart smartphones and a new breed of smart-enough smartphones aimed at the lower end of the market," he said.

"ZTE and Huawei have already launched lower-cost smartphones this year, with others surely to follow, and if they achieve volume, the average selling price of a smartphone very likely will get pushed down."