Smartphones will make-up the majority of mobile phone shipments in five years time, as prices continue to fall. The number of smartphones shipped will reach 1bn annually by 2016, up from 302m last year.

So says the analyst, Juniper Research, in a new report, Smartphone Evolution Strategies: Premium, Standard and Economy Markets 2011-2016. The report notes that competition amongst vendors offering premium smartphones is intense, and concludes that the best opportunity for new players is through economy models, with an unsubsidised retail value of $150 (£93) or less.

But the report also says that the market for standard smartphones ($151-$399) and premium smartphones ($400 and above) will remain robust, noting that new technologies such as NFC, 3D and Biometrics are coming to these devices. The report also notes that smartphones are coming to market that can morph into other devices – notably tablets and netbooks.

“In developed markets, many consumers will want to upgrade from a feature phone to a smartphone, but still pay a feature phone price,” says report author, Daniel Ashdown. “In emerging markets though, lower average consumer spending power and lack of operator subsidies will make a low price point essential.”

Juniper predicts that open-source operating systems – predominantly Android – combined with the falling cost of key components will make this possible.
The report provides substantial primary research on smartphone hardware specifications and analysis of recent trends and developments. Other primary research examines smartphone plans and handset subsidies, and the impact on subscriber retention costs for operators. There are more details here.