CHART OF THE DAY: Why Smartphones Remain Out Of Reach For Many Global Consumers

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The next monster wave in smartphone adoption will supposedly come from populous emerging markets like India, China, and Brazil. But it’s important to keep something in mind: Smartphones remain expensive. That’s a huge cost barrier in lower income countries where carrier subsidies are limited or unavailable. Also, limited credit access means few can qualify for phone contracts anyway.

In his annual almanac, mobile analyst Tomi Ahonen breaks down the share of phones sold globally by price (the unsubsidized price). He finds nearly 40% of phones sold are no-frills handsets that cost less than $39. That makes sense, considering that across India, average monthly income is still about $95, and in relatively wealthy Beijing, China, it’s $740. In Brazil, the monthly paycheck is $663. In other words, an average Brazilian worker would have to set aside a good part of a paycheck for a premium smartphone like Apple’s iPhone, not to mention monthly data and voice plans like those offered by local carrier Oi starting at $40. Until hardware prices come down, smartphones won’t become a truly global mass consumer item.

chart of the day, smartphone cost globally, oct 2012

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