According to the OECD, 5 billion people will be considered “middle class” by 2030 – that is, making between $10 and $100 per day, adjusted for the purchasing power of their country. Much of this growth is expected in emerging markets – India, China, the Middle East, Africa and Latin America. Over the past decade, these markets have entered the online era thanks to smartphones. With wireless technology bypassing the need for costly infrastructure, smartphones became the first and primary conduit to the internet for whole swaths of people around the globe. In the past three years alone, the global number of smartphone connections has doubled to more than 4 billion.
Of course, the phones sold in the developing world were largely budget phones – not the fastest, not packed with the most features, but affordable, reliable devices that put the power of mobility into the hands of hundreds of millions. However, two forces are converging that will spur the next boom market for the smartphone industry.
The rising “middle class” means increased purchasing power and savvier consumers. Also, smartphones have become increasingly essential to how people live, work and communicate in emerging markets. For example, the prevalence of the mobile internet has fostered the rise of mobile banking – often in areas underserved by traditional financial institutions. Similarly, smartphones introduced chat apps that serve as hubs for ecommerce, educational services, health information and more. And, of course, smartphone users the world over have taken to their phones to enjoy movies, TV, music, games and more – making their smartphones a key part of their entertainment life.
So, with an empowered middle class and a generation steeped in smartphone usage, emerging markets are primed to move into the next phase of smartphone ownership – a phase defined by the “new premium” device.
With 4G connectivity in the developing world catching up to the rest of the globe, consumers are looking to put these new, faster connections to the test. No longer is any smartphone good enough – they need and want a device that works quickly, comes with the newest features, supports the services they’ve come to rely on and still fits within their budget. For this growing group of consumers, the midrange device is meeting them where they are – and MediaTek is proud to be at the core of this exciting growth.