Apple and RIM make up 66pc of phone revenue

Apple's iPhone and RIM's BlackBerry line are effectively strangling the market for mid-range phones, analysts at Deutsche Bank found in a new report. The companies now represent two thirds of all phone revenue but combined only make up about 10 percent of the market, leaving very little room for anything but very low-end, high-volume devices. Korean companies are suffering the most as their focus on feature-laden but "dumb" phones that are no longer selling as well.

"We think the change that Apple has forced on the industry continues to play out," the bank said. "Those mid-range feature phones used to be Samsung’s and LG’s bread and butter products upon which they built their operations. Those kinds of phones are vanishing from the shelves in the US, increasingly replaced by high-end smartphones subsidized down to mainstream prices."

LG, Samsung and companies that had previously thrived in the mid-range, such as Motorola and Sony Ericsson, have lately found themselves having to switch to smartphones to stay profitable. Nokia is currently the market leader in sheer units, but its dependence on low-end phones has collapsed its profits and handed market share to Apple and RIM even in once secure markets, such as Europe.

Many of the better-selling phones in the US now cost between $100 and $200 with smartphone plans even on contract. Most basic phones, meanwhile, are frequently selling for $50 or less and are sometimes free. [via GigaOM]

By Electronista Staff

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