Feature phones: A dying breed

Feature phones now constitute 80% of global mobile phone shipments, leaving the rest to smartphones. That proportion is changing and by 2015 smartphone shipments will overtake feature phone shipments. As per iSuppli’s projections, 1.03 billion smartphones will be shipped in 2015 which will comprise of 54.4% of total mobile shipments.

Three reasons are contributing to this trend: cheap handsets, Android and the rise of apps. Of the three, Android is the biggest with residual affects on the other two. Google’s Android open operating system, which is bolstered by the recent Motorola purchase, has been the preferred choice for many vendors. This ‘free and open’ operating system has led to lot of cost savings in terms of the content that goes on the phone which was in turn is diverting to pulling down hardware prices.

In India, the cheapest Android powered smartphone costs around Rs.5000 (US$108).There are even cheaper 3G touchscreen mobiles from other manufacturers. Micromax, Karbonn, Alcatel and Spice have decided to race it to the bottom. How low and how long can they go? The manufacturers will go as low as they can. As long as there is a profit on volume sale or until the two breeds coalesce.

Feature phones are still relevant in today’s world and are the main choice of phone manufacturers to bring the next billion onto the connectivity path. Nokia has just launched Nokia 100 and Nokia 101, its cheapest phones ever, which are targeted for African users.

With ever falling hardware prices, availability of open operating systems and the rise of free content, feature phones and smartphones will slowly converge.

The convergence is already taking place. There are phones which are not smartphones in the strictest sense but are equipped with 3G, social networking apps and email. Manufacturers are getting so innovative that the distinction between smartphone and feature phone seems to blur.

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