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Sale of budget handsets to rise

Over 300 million handsets priced under US$20 will ship globally each year by 2011, research has claimed.

A study by ABI Research estimates that more than 50% of ultra-low cost handsets (ULCHs) will be shipped in the emerging markets of Asia Pacific, and the remainder to markets in Africa, the Middle East, Latin America, and Eastern Europe.

"The growing demand for ULCHs has provided mobile operators and handset vendors with a quick route to a greater share of the emerging markets," said ABI Research analyst Shailendra Pandey. "The down side is that they are manufacturing and shipping a greater proportion of low-cost handsets, which can adversely affect their profits."

Pandey highlighted Nokia, whose profits in its fiscal third quarter of 2006 were down compared to the same quarter a year ago, because a greater portion of its sales came from low-cost handsets.

ABI Research expects that by 2011, almost one out of every four handset shipped globally will be an ULCH.