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Why Banks Should Prepare Themselves for the Rise of Cheaper Smartphones

Intex-Cloud-FXIt was February 2014 when the International Data Corporation (IDC) made their bold claim: ‘The growth of the smartphone market is in steady decline, and in just a few years’ time, will hit an all-time low of just 6.2%.’

Citing market saturation as a critical factor in this down turn of fortunes, the IDC’s Worldwide Quarterly Mobile Phone Tracker goes on to state that profits will only continue to fall as the industry looks to tap into new markets with cheaper devices.

In a press release, IDC Research manager, Ramon Llamas, said:
“In order to reach the untapped demand within emerging markets, carriers and OEMs will need to work together to bring prices down…Last year we saw a total of 322.5 million smartphone units ship for under $150 and that number will continue to grow going forward. We’ve already seen numerous smartphone announcements targeting this price band this year, with some as low as $25.”

The rise of cheaper smartphones
The $25 smartphone Mr. Llamas refers to is likely to be the Intex Cloud FX, a joint venture between Intex Technologies and Mozilla, best known for their popular Firefox web browser.

First released in India back in August 2014, Keshav Bansal, Marketing Director at Intex Technologies claimed the new Cloud FX would: “enable the masses to get the smartphone experience at the cost of a feature phone.

Whilst those ‘masses’ may be the ones targeted by Intex and Mozilla in emerging nations, consumers in developed countries are already beginning to feel the benefits of high-end technology at lower cost prices.

Motorola’s Moto G smartphones, with its 5MP camera, 16GB of built-in memory and impressive screen resolution available for a fraction of the cost of other Android devices, whilst Nokia have got in on the game too, cornering the market for affordable Windows Phone devices with their Lumia handset.

What this means for consumers
As these kind of affordable smartphones start to become commonplace on retailers’ shelves, the way many of us manage our lives on the move will continue to evolve. Those of us already fortunate enough to own the latest iPhone or Android are already permanently connected to the world at large, with all our shopping, leisure, business and financial services only a quick tap away.

Over time, this on-demand mobile access to everyday services will be just as affordable to those whose budgets once prevented them from owning a smartphone.

What this ultimately means, is that, without the cost or inconvenience of a laptop, desktop or other device, more customers will be well equipped to keep in touch with friends, make purchases, manage their business and take greater control of the money they use to pay for it all.

This latter point is good news for banks who already enjoy lower operating costs and increased customer satisfaction thanks to mobile banking. Though does that mean they should simply sit back and wait to reap the rewards of cheaper smartphones? Not if they’re to really make the most of them.

A pro-active approach to mobile banking
In a recent blog post, Alex Bray of financial software firm, Misys looks at South Africa’s pro-active approach to getting customers onboard with their mobile banking app by not only offering low-cost iPhones with said app pre-installed, but breaking down cost barriers to mobile data access by turning their own branches into our-of-hours WiFi hotspots.

Yet whilst cost may not be an obstacle for much longer, other factors may well be.

First of all, there’s the compatibility issue. Many banks have already taken measures to ensure their apps work with major operating systems like Android, Windows and iOS, though if they’re really to prepare themselves well for the rise of new, cheaper devices operating on platforms such as Firefox OS, it makes good sense to look at making their technology accessible on emerging platforms.

Then there’s the learning curve to consider. Late-adopters taking to their first smartphone are unlikely to boast the same kind of technological intuition as their iPhone 5-touting neighbours. For banks looking to take advantage of this new boom, that means ensuring apps are not only as easy to use as possible, but in providing at least some level of support to help tech-novices make the most of the tools at their disposal.

In doing so, the banking industry can better prepare itself for growth in the face of the smartphone market’s continual decline.