Projected Decline in Sub-$200 Smartphone Shipments to Exceed 230 Million by 2030

Rising costs for memory and chipsets, along with increased baseline hardware specifications and a lower appetite from manufacturers for low-margin products, are identified as key factors driving this downturn. As a result, consumers may face limited options, either having to upgrade to more expensive models, delay device replacements, or turn to second-hand phones.

Counterpoint Research Principal Analyst Yang Wang noted that while the overall smartphone market is set to recover in terms of volume, the affordable segment will not regain its previous size. The focus is shifting toward better-featured mainstream and premium devices, although these higher-end categories cannot fully compensate for the volume lost in the budget segment.

This trend poses a risk to digital inclusion, particularly in emerging markets where the high cost of smartphones hinders mobile internet access. The diminishing availability of low-cost devices could slow first-time smartphone adoption and broader internet connectivity efforts.

By 2030, while the overall smartphone market is expected to recover, the sub-$200 segment will still experience a decline of about 40%. In contrast, devices priced at $200 and above are projected to grow by 26%. The entry-level category will face the greatest challenges, as rising component costs constitute a larger share of the total production cost.

The growth patterns across various price segments will diverge significantly through 2030. Premium smartphones are forecasted to grow at a compound annual growth rate of around 7%, while mid-tier and high-tier segments are expected to remain largely stagnant. This stagnation suggests that budget consumers are not merely moving up in price but may also be holding onto their devices longer, resulting in a permanent reduction in demand for new phones.

To address the widening gap in smartphone access, industry stakeholders will need to implement measures such as expanded financing options, trade-in programs, targeted subsidies, and tax reforms aimed at maintaining the viability of budget smartphones.

As premium smartphones increasingly dominate both shipments and market value, they will drive revenue growth and innovation for the industry. Factors such as favorable financing, trade-in programs, and brand loyalty are expected to sustain demand in this segment. Technological advancements like foldable devices and AI capabilities will also provide manufacturers opportunities to enhance their average selling prices.

Established brands like Apple are likely to lead the premium market, while Samsung is well-positioned to capture value across different tiers. In the higher-end segment, Huawei is expected to drive growth with its premium flagship offerings, although other Chinese brands may see varying success.

A stronger recovery in smartphone volume is anticipated from 2028 onward as supply chain issues ease and pricing stabilizes, but the landscape will be permanently altered. The mid-range market is projected to account for the bulk of mainstream sales, while premium products will dominate profitability.

Innovations in device design and technology are expected to enhance vendor revenues, though they alone will not trigger a significant shipment surge. By the end of the decade, the emergence of 6G-capable devices could initiate an upgrade cycle that enables advanced features to reach more affordable price points.

In summary, ensuring the availability of budget-friendly smartphones is crucial for extending the benefits of emerging technologies and digital connectivity to lower-income populations globally.