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Global smartphone growth in the next five years will be fuelled by sub-US$100 devices, with total handset sales expected to grow from 1.88 billion units in 2014 to 2.16 billion units in 2020, according to analyst firm Ovum.Ovum has forecast the sub-US$100 price tier will comprise more than 40 per cent of sales in developing as well as developed countries in 2020, up from 13 per cent in 2014.

Between the 2013 fourth quarter and 2014 fourth quarter, Ovum research has revealed the median price of prepaid and SIM-free smartphones decreased 28 per cent, from US$360 to US$258, which it attributes largely to a structural shift towards lower-end smartphone models, rather than price decreases in particular segments.

By 2020, Ovum has forecast smartphones will comprise 95 per cent of global handset sales, up from 65 per cent in 2014, with Android (80 per cent) and iOS (14 per cent) devices to continue to lead the market, while Microsoft’s Windows Phone will capture most of the remaining market with a 4.2 per cent market share.

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Handset unit sales forecasts by segment and operating system, 2013-20.

Africa, the Middle East and Latin America will lead the way in terms of growth through to 2020, while in the Asia Pacific the Chinese market is reaching saturation.

“Smartphones are leading the path to digital transformation, and therefore have yet to unlock massive opportunities in many markets,” Ronan de Renesse, Ovum Consumer Technology practice lead analyst, commented, adding that with almost all handsets sold in 2020 to be smartphones, this “will lead to great socioeconomic achievements across the world in the next five years”.

“The entire device value chain is bending backwards to manufacture and distribute cheap smartphones at an acceptable level of quality,” de Renesse commented.

“The benefits of transitioning a feature phone user to a smartphone are significant for operators and for digital service providers like Facebook and Google, to the point of becoming a strategic imperative.”

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