Why are Premium Smartphones Becoming More Popular than Feature Handsets?

The smartphone market has enjoyed genuinely exponential growth across the globe during the last decade, reaching a cumulative value of $432 billion at the end of 2017.

In recent times, the market has also become increasingly dominated by premium handsets, with examples such as Apple’s iPhone X selling at an almost unprecedented rate. In contrast, the demand for feature phones seems to have diminished, even in emerging countries such as Africa where they once commanded a 20% market share.

In this article, we’ll look at why premium handsets are commanding the market, and ask whether this trend will be sustained in the longer-term. 

1. Premium Handsets are Now More Affordable than Ever

There’s no doubt that premium handsets are becoming increasingly affordable, particularly when you secure discounted contracts from distributors such as fonehouse. This has negated the main competitive advantage of feature phones, particularly higher-end handsets that have characterised this market.

In addition to discounted contractors, brands have also been able to reduce the total cost of premium smartphones thanks to significant advancements in technology.

By accessing cheaper smartphone components, reducing the cost of construction and sharing these savings with customers, manufacturers have been able to increase the value proposition of premium handsets like never before.

2. Feature Phones are Often Misunderstood by Customers

While distributors and handset retailers have a clear understanding of the feature phone market, the same cannot be said for customers.

In fact, many consumers misunderstand feature phones, considering them to be low-end handsets that represent the budget marketplace. While this is at least partially true, there are also high-end feature phones that offer diverse functionality and can cost anywhere between £200 and £300 on average.

With the higher end of the feature phone market also converging with budget smartphones, customers have become even more confused during the last couple of years.

As a result, feature phones have struggled to maintain a consistent market position and many customers now instead prefer to choose from the increasingly diverse range of modern smartphones.

3. Manufacturers are Making Less Feature Phones

If we accept that the smartphone market has diversified on the back of more affordable technology, it stands to reason that there’s now a wider range of handsets available.

This has compelled brands to realign their focus in the modern age, as they look to invest more in the development of smartphones and compete aggressively with their rivals. As a result of this, manufacturers are making less feature phones across the board, with market leaders such as Safaricom actively pulling handsets from outlets in Kenya in order to encourage smartphone up-take.

As customer behaviour continues to change and the demand for smartphones increases, the feature phone market could well decline further in the years to come.