137 million people in Brazil own a mobile phone, and one-third of them own a smartphone. Brazil is the second largest country for downloads within the Google Play Store, and its citizens are some of the most eager app consumers. Brazil’s active Android smartphone market presents a huge opportunity for device manufacturers to capture the other 91 million mobile subscribers as they make their first ever smartphone purchase.
In recent years, other countries have seen a massive adoption of smartphones thanks to a rush of competing brands entering the market and driving down handset costs. The smartphone market in Brazil is big, but could it be bigger?
Brazil's opportunity for affordable smartphone manufacturers
Currently, the Brazilian smartphone market is dominated by Android handsets from three major, global brands—Samsung, Motorola, and LG:
Brazil’s smartphone penetration rate is estimated to reach 42.5% by 2017, and all mobile brands, not just the dominant ones, have an opportunity to capture a piece of the market. Smaller brands could capture more users by introducing budget smartphones to the Brazilian marketplace.
We’ve recently seen an explosion of smartphones from low-cost manufacturers fuel smartphone growth in countries like India and Indonesia. We’re already starting to see hints of this in Brazil. Chinese manufacturer Xiaomi is looking to replicate its success at home and in India by expanding its budget devices into Brazil. Asus—a Taiwanese company—is launching its budget ZenFone 2 in Brazil this month. If budget handsets are made widely available in Brazil, the demand for smartphones will likely increase even more than currently predicted.
Budget handsets fuel smartphone growth globally
India has set the precedent for budget smartphone growth globally. Due to the availability of low-cost devices, users are quickly moving from feature phones to smartphones and gaining Internet connectivity for the first time. Younger, budget smartphone manufacturers such as Xiaomi are quickly gaining market share in India while older, major manufacturers’ market share is slipping.
Over the past year, global giant Samsung has seen market share in India decrease while the smaller, India-based Micromax has dramatically increased its penetration over the same period of time. The market share of the Indian companies Xolo and Lava, and the Chinese company Xiaomi all grew as well, which demonstrates how the demand for affordable devices is driving the growth of options in India.
Smartphones facilitate connection
As more users in Brazil gain access to their first smartphones, their opportunity for connectivity increases. However, the high cost of data prohibits them from using their phones to their full potential, including downloading and using apps. Someone in Brazil would have to complete 13 hours of minimum-wage work in order to afford a 500 MB data plan.
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