A recent report from Juniper Research shows that, between 2009 and 2014, annual sales of low-cost mobile handsets will increase by 22% to over 70 crore.

Operators and device manufacturers are increasingly looking to emerging markets, to fuel future growth. The development of very low cost handsets and devices are critical to achieving this aim.

Efforts by industry players to lower the total cost of ownership (TCO) for devices and services to below Rs.244.93 ($5) are already reaping benefits in markets such as Bangladesh, Pakistan and India. Meanwhile, players such as Nokia are developing invaluable content-driven services that will encourage first-time mobile users to keep on using their devices and improving their standards of living.

According to the Low-Cost Handsets Report author Andrew Kitson: "With around 80% of new mobile users set to come from emerging markets over the next six years, it is essential that operators and vendors work together to dilute the price barriers associated with mobile technology and to provide ongoing support through the development of specific social and personal services, such as Nokia's Life Tools suite. However, it is clear that commercial success will only be achieved if operators adopt revolutionary new business models and if governments can be persuaded not to place excessive taxes and duties on device sales and imports."

The study also predicts the Africa & Middle East region will account for the largest annual shipment volume by 2014, with its 16.6 crore low-cost handsets representing 24% of all sales that year and up by 54% over the term of the forecast period.

Smartphones are projected to account for 27% of mobile device shipments in 2014 (up from 13% in 2008), the market is effectively polarising into two groupings – entry-level and high-end devices: this means that the market for mid-range devices is being squeezed and vendors of such devices (such as Motorola) are suffering.