EY comments on the falling prices of smartphones and the impact on device manufacturers

8 April 2014

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Adrian Baschnonga, Lead Telecommunications Analyst at EY, comments on the falling prices of smartphones and the impact on device manufacturers:

"Falling smartphone prices reflect changing dynamics in the global device market. Global growth in smartphone shipments is slowing, and there is an increasing focus on providing low-cost devices to consumers in emerging markets. Ambitious Asian device vendors are aggressively pursuing gains, heightening competitive intensity in an industry that has become accustomed to stellar growth rates in recent years. At the same time, a number of established players have outlined strategies to boost their market shares.

"Looking ahead, smartphone manufacturers face a challenging period as they adapt to fast-changing market conditions. Demand is shifting from flagship models to budget smartphones, yet different categories of device such as wearables are also emerging. Many vendors will need to realign their product portfolios, targeting growth at particular points in the price spectrum while also cutting costs if they are to preserve their profit margins.”