Android's secret weapon: Loads of low-cost phones

Android has a chance to lock down the low-cost smartphone market over the next three years--if it doesn't get ahead of itself.

Android has ruled the U.S. smartphone market share for months and months now, and based on a new report, Google's mobile OS will only continue to grow stronger.

But that could be helped in part by a factor that still proves to be a barrier for some consumers when it comes to smartphones: pricing.

A new report from market intelligence firm In-Stat asserts that 339 million low-cost Android smartphones will ship worldwide in 2015. Low-cost is defined at $150 and under. Right now, most smartphones start at $199 with the signing of a two-year service agreement.

The group argues that mobile phone consumers only have one choice for a mobile operating system in this budget-friendly category, and that would be Android. As Ice Cream Sandwich and further (and better) versions of Android OS roll out in the future, older versions can still be made useful.

In-Stat research director Allen Nogee explained in a statement:

The low-cost Android handset segment will cause some fragmentation in the Android platform. Most low-cost Android smartphones are likely to be released with Android 2.2 or 2.3, since these versions are a good blend of features with modest memory and processor usage. The Ice Cream Sandwich (Android 4.0) step-up in memory and processor demands makes this release less attractive for low-cost Android devices.

However, that argument could certainly be applied to other mobile platforms. Just look at the iPhone 3GS. That device is selling for free with a two-year contract, and the iPhone 4 now retails for $99 on-contract, which is an incredible steal if you can settle for 8GB of space and don't care about Siri.

In-Stat also acknowledges that this particular smartphone market is Android's to lose as this space "could get much more competitive, especially as other OS vendors begin to target the space." The study cites Huawei, MicroMax, Motorola, Samsung, Spice, and ZTE as potential competitors, mainly because these low-cost devices will be built to at 600MHz speeds or less with a single-core EDGE chip that costs less than $10.

At least that's the idea for the short-term. By 2015, the price points on smartphones and the materials that go in them could be drastically different. After all, if an iPhone 4S can be made for $188 apiece now , smartphone parts could be very well much cheaper in the next few years.

This post first appeared on ZDNet's Between the Lines blog.

 

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