SANTA CLARA, CA – Low-cost smartphone shipments are forecast to double every year from 2010 to 2016, increasing from 4.5 million to 311 million, says NPD DisplaySearch.

The low-cost smartphone segment is defined as models with a selling price of less than $150.

Most of the demand (60%) is from the Asia Pacific region, where a large majority of component suppliers and manufacturing factories are located, says the firm. These solutions have a shorter lifetime than high-end smartphones and are manufactured via readymade solutions from application processor manufacturers. The product mix requires continuous development cycles for new products, says NPD DisplaySearch.

Android is the most popular operating system for low-cost smartphone designs because it is open source. Brands and manufacturers tend to use mature, low-price components, rather than developing new ones. For the display, this means standard a-Si TFT LCD rather than high-resolution LTPS, says the firm.

The penetration rate of Android-based low-cost smartphones is increasing, with NPD DisplaySearch forecasting their share to grow from 2% of total smartphone shipments in 2012 to 29% in 2016. Local brands and “white box” vendors in China have taken an aggressive stance in capturing market share.