Cheap smartphones gain momentum

Does success of Nokia’s Asha smartphones indicate growing demand for budget mobile phones or cheap smartphone deals?

Demand for cheap smartphones is on the rise, according to a BBC News report.

Nokia's quarterly results caused a stir last week with the news that sales of its flagship Lumia range of Windows Phone 8 handsets had sold 4.4 million units.

However, the Lumia sales were dwarfed by those of Nokia's budget Asha range - more than 14 million of these relatively cheap smartphones were sold in the same period.

Speaking to the BBC, Ian Fogg, principal analyst for research firm IHS, stated: "We forecast that by 2016, 31% of the global overall handset market will be low-end smartphones."

Cheaper smartphones can now perform most of the same functions as the top-end models, letting users surf the web, use social media and pick up email, for example. However, they often suffer from lower resolution screens, weaker cameras, and inferior performance.

That means the real attraction for consumers is cost, says Fogg, explaining that a basic smartphone can be picked up in the UK for as little as £29.99 - a far cry from the iPhone 5's eye-watering £529.

Budget handsets made headlines last week, with the news that ZTE is planning to launch a range of cheap smartphones running a new Firefox operating system, as opposed to the popular Android platform.

Rumours also started swirling that Apple might be developing a new, cheaper iPhone. Some outlets reported that a senior Apple executive denied these rumours, although the story on news service Reuters was later withdrawn.

Fogg, however, argues that it's the right move for the company. "I think Apple should be more aggressive with its smartphone range," he said.

"I think the strategy they have had of reusing previous year's models [as cheaper options] has been quite smart, but there is also an opportunity to design a new product that hits that low price point."

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