Smartphones soon to be cheaper than ever, new report says

Brands looking to expand their audience via mobile video ads will soon have a much wider potential customer base, as falling prices for smartphones means that more people than ever before will own a mobile device.

Posted on Dec 14, 2012 by YuMe

Brands looking to expand their audience via mobile video ads will soon have a much wider potential customer base, as a new report from Informa Telecoms & Media indicates rapidly falling prices for smartphones means that more people than ever before will own a mobile device.

By 2017, the average smartphone will cost around $152, and approximately 50 percent of all internet-enabled cellphones will cost under $150, the report predicted. In comparison, the average smartphone was priced at around $188 in 2011. Between last year and 2017, the percentage of smartphones in the marketplace costing more than $250 will drop from 85 percent to 33 percent, FierceWireless reported.

Considering how widely popular smartphones are now – Nielsen reported earlier this month than more than half of all U.S. adults already have one – massive price drops could mean than advertising on mobile devices has the potential to be even more effective in the future.

While consumers can expect it to be easier to afford a smartphone over the next five years, the number of options available in the marketplace may not be as diverse in 2017 as it is today, according to Informa Telecoms & Media's research.

"As the market develops, the supply chain will increasingly be divided between two camps – the innovators who will continue to introduce new features and high-performance components to the marketplace and followers who will take this innovation to the mass market in later years," Malik Saadi, principal analyst at Informa Telecoms & Media, said in a statement.

How this shift can boost brands
While an increase in the number of more affordable smartphones may not help all mobile device manufacturers, it does represent a new potential opportunity for video advertisers to reach a wider audience.

ReelSEO reported last year that 48 percent of all smartphone owners use their mobile device to view video content, and 82 percent of them notice ads for mobile. Additionally, 71 percent said they use a smartphone to look up more information after seeing an ad, and 74 percent of smartphone owners indicated that they have made a purchase in conjunction with using their mobile device.

Among those who said they had noticed an ad on mobile, 35 percent said they later visited a related website and 49 percent of them indicated that they had purchased a product or service as a result of mobile advertising.

"So if you don't believe in the power of marketing to those smartphone users, you might want to take another look at that stance," ReelSEO contributor Christopher Rick wrote.