The pioneer in providing Knowledge Process Outsourcing (KPO) services, Evalueserve, estimates that the global Average Selling Price (ASP) for approximately 70 per cent (4.8 billion) of active mobile phones will fall under $100 by 2015.
Evalueserve reported the price fall will happen due to the increased competition among manufacturers and focus of manufacturers on lower-middle income countries such as China and India that are cost-sensitive, but volume heavy.
The report estimated that the global handset demand will rise to approximately 2.58 billion in 2015, with the replacement market accounting for approximately 94 per cent of the gross demand. The dominant replacement market and lower ASP of mobile phones will drive handset manufacturers to improvise and innovate to stay competitive.
According to the Evalueserve analysis, Nokia, the largest mobile manufacturer, recorded an approximately 39 percent fall in its ASP between 2005 and 2009. Similarly, Samsung"s ASP for mobile phones declined approximately 33 per cent over the same period.
With the declining subscriber additions, the demand for replacement handsets is expected to become the key driver for the mobile market. Evalueserve estimates the share of handset replacement demand to the overall handset demand to increase from 73 percent (1.46 billion) in 2010 to 94 percent (2.43 billion) in 2015. Over the same period, gross handset demand is expected to increase at a CAGR of 5.1 per cent from 2.0 billion in 2010 to 2.58 billion by 2015.