The Android Operating System (OS) has taken the smartphone world by storm and in just two years, it has become the top smartphone OS worldwide. In the US, Android reached #1 in smartphone OS sales because wireless operators that did not carry the iPhone chose Android as their smartphone solution.

But the Android handsets selling in the US and Europe are not the same low-cost Android handsets selling elsewhere and NPD In-Stat research forecasts low-cost Android handsets to reach a penetration rate of 80% of total smartphones in Africa, India, and China by 2015. 

The low-cost Android smartphone segment is made up mostly of smartphones released with Android 2.2 or 2.3 as these versions are a good blend of features with modest memory and processor usage. The low-end low-cost smartphones generally stick with EDGE and processors running at 600MHz or lower, because a single-core EDGE chip sells for well under $10.

NPD In-Stat means low-cost smartphones that cost $150 or less. Smaller phone manufacturers will sometimes purchase from the “gray market” where component manufacturers typically don't pay licensing fees, royalties, or taxes for the products they produce. Early competitors in the market include Huawei, MicroMax, Motorola, Samsung, Spice, and ZTE.

"All-in-all, the way that Android has spread worldwide, low-cost Android will also spread worldwide. But, where most Android phones are being sold in developed regions of the world, low-cost Android will flourish in emerging areas; however, it will face heavy competition in some regions. Samsung has bada, and Nokia is developing Meltemi. In addition, Microsoft has stated that it wants to sell Windows Phone in these developing regions as well and could aggressively lower prices to gain market share. While Google profits in these regions from advertising revenue, Nokia and Samsung benefit the old-fashioned way, by selling hardware,” said Allen Nogee, Research Director.

Among the research findings are:

• Unit shipments for low-cost Android smartphones will approach 340 million worldwide in 2015.
• The low-cost Android handset segment will cause some fragmentation in the Android platform.
• The Ice Cream Sandwich (Android 4.0) step-up in memory and processor demands makes this release less attractive for low-cost Android devices.