Budget smartphones face growing pressure as prices rise through 2030

Yesterday 12:32

By: Azzat Manal

Budget smartphones face growing pressure as prices rise through 2030

The global market for low-cost smartphones is expected to come under increasing pressure through the end of the decade as rising component prices and higher technical requirements make inexpensive devices more difficult for manufacturers to produce profitably.

According to estimates from Counterpoint Research, more than 230 million smartphones priced below $200 could disappear from annual global shipments between 2025 and 2030. The research firm expects the share of this segment to decline by around 40% over the same period, highlighting a significant shift in the structure of the smartphone market.

The overall smartphone market is projected to remain relatively stable at around 1.2 billion units annually by 2030, only slightly below recent levels. At the same time, devices priced at $200 and above are expected to gain market share, with shipments in this broader category projected to increase by about 26% over the period.

Counterpoint attributes the pressure on entry-level smartphones partly to rising prices for key components, particularly memory and semiconductors. Because these components account for a larger proportion of manufacturing costs in inexpensive devices, even moderate price increases can have a stronger impact on their final retail prices and manufacturers' margins.

Manufacturers are also facing higher minimum specifications as consumers increasingly expect features such as better cameras, larger storage capacities, faster processors and improved connectivity even in relatively affordable models. Meeting these requirements can make it harder for companies to maintain smartphones below the $200 price threshold.

Another factor is manufacturers' changing approach to less strategically important markets. Companies may increasingly concentrate their resources on segments where profit margins are higher, potentially reducing the number of inexpensive models available in certain countries and regions.

The expected contraction of the budget segment could also affect consumer behavior. Some buyers may choose to spend more on a new smartphone, while others could keep their existing devices for longer or turn to refurbished and second-hand models. Longer replacement cycles could therefore become increasingly common among price-sensitive consumers.

At the premium end of the market, Counterpoint expects smartphone shipments to grow by roughly 7% annually through 2030. By comparison, the mid-range and upper-mid-range segments are expected to experience limited growth, suggesting that the expansion of more expensive devices may not fully compensate for the decline in entry-level smartphones.

The consequences could extend beyond smartphone sales. In low- and middle-income countries, the price of a device remains an important barrier to mobile internet adoption. A smaller supply of affordable smartphones could make it harder for people using basic phones or shared devices to move to personal smartphones with broader access to digital services.

Affordable smartphones play a particularly important role in expanding access to mobile banking, education, online commerce, government services and digital communication. Any sustained decline in the availability of devices below $200 could therefore have implications for digital inclusion as well as the technology industry.

The smartphone market is consequently entering a period in which manufacturers will have to balance rising production costs with consumer demand for affordable devices. By 2030, the evolution of component prices, manufacturing strategies and consumer replacement habits could determine how much access to smartphones remains available at the lower end of the market.