The era of cheap smartphones is coming to an end: A big decline is expected in devices under 200 dollars

The era of cheap smartphones is coming to an end and this brings with it a significant structural change in the technology world. A new report by Counterpoint Research predicts that there may be a 40 percent decline in the production of smartphones under $200 by 2030.

This change means that approximately 230 million devices are withdrawn from the market worldwide. The situation in question carries a risk that it may make it difficult for users, especially those living in low-income areas, to access the internet.

Artificial Intelligence and Rising Component Costs

The basis of this contraction in the smartphone market lies in the intense demand for artificial intelligence data centers. This increase in demand causes RAM and chipset costs to rise throughout the electronics industry.

Manufacturers prefer to focus on products with higher features rather than entry-level devices with low profit margins. Phones with minimum technical specifications are being replaced by devices focused on portable media production.

This situation creates a structural shock effect in the technology sector. In an environment where component costs are climbing, higher device features justify higher price tags.

Many consumers tend to keep their existing phones longer due to rising prices. This situation causes device replacement cycles to become longer for both consumers and sellers.

The refurbished phone market is becoming an important alternative in this new era. The evolution of device insurance plans into longer-term subscriptions stands out as a factor that supports the second-hand market.

Connectivity Issues and the Future of the Market

Counterpoint Research analyst Yang Wang states that the market will recover on a unit basis, but the affordable segment will not return to its previous position. Although the total size of the market remains similar, there is a serious differentiation in terms of value.

Deals are now shifting towards mainstream devices and premium products with better features. However, upper segment devices cannot cover all the lost entry-level volume.

One of the biggest concerns is that the loss of affordable new smartphones increases connectivity risk. This poses a serious obstacle for users connecting to the Internet for the first time in low-income markets.

Although budget-friendly phones are not expected to disappear completely in the future, it is estimated that the options will be quite limited. Second-hand devices, simple phones and niche solutions seem to be candidates to fill this gap.

This change in the technology world heralds a new era in mobile device ownership and internet access. So, do you think this increasing trend in smartphone prices will further deepen the digital divide?