This chart shows how much people spend on their smartphones

Last year, the number of smartphone shipments worldwide exceeded one billion annually for the first time, and all indications point to that number going up again by the end of this year. The smartphone market is changing considerably - manufacturers like China's Xiaomi are rising at the expense of the likes of Samsung, while BlackBerry's share of the market has completely collapsed, predicted to end this year at just 0.8%

Windows Phone isn't faring much better in raw percentage terms, at around just 2.5% of the worldwide smartphone market. But it is at least showing signs of life, with many major new apps being launched in recent months. Of course, we all know that Android is the most popular platform among users, with around 85% share, followed by iOS, and then Windows Phone in a distant third. But what are smartphone buyers actually spending on their devices? 

The chart above shows how handset sales are broken down by price category for each of the top three smartphone platforms, according to data provided by industry analysts IDC for Q2 2014.

For both Windows Phone and Android, the majority of sales are in the low end, with 61.4% and 58.66% respectively of each platform's sales made up of devices costing under $200 at full price. iOS, of course, has no devices on sale in this category - as Statista notes, the cheapest iPhone on sale remains the three-year-old iPhone 4S, which still costs $450 off-contract. However, the overwhelming majority of iPhone sales are in the high-end category, costing $400 or more, with the remainder likely being made up of international sales of older, lower-cost devices. 

Relatively few of Microsoft's Windows Phone sales come in the form of high-end flagship-class devices, with just 13.7% of total platform sales comprised of handsets costing over $400. Almost a quarter of Windows Phone sales were in the $200-$400 mid-range. 

Sales of flagship and mid-range devices were more evenly spread on Android, with just under 20% of sales made up of devices costing $400 or more, and 21.5% of handsets priced at $200 to $400.

So what are the key takeaways from this? On the Apple front, there's nothing new. We already know Apple enjoys huge profit margins on its devices, and that most of them come with a very big price tag.

However, it is interesting to see how much more successful Android is in the flagship space than Windows Phone. Likewise, it is worth nothing that, despite many Windows Phone fans perceiving the platform as a more 'premium' offering, it relies more on low-cost and mid-range handset sales than Android does.

Source: Statista via @jackschofield | graph via Statista

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$1900 (at least) coming up in a few months to Verizon to replace 3 phones. Damn Verizon and their policies towards us unlimited data plan subscribers.

I'd like to know how many people that buy low end Android use them like smart phone.
Here in Italy many low end Android phone are used like phone and not like smart phone.

I love my Lumia 1520, but I can understand why it is so hard for Microsoft to gain market share with such limited carrier availability. WPs are in few stores and the ones there are old and forgotten models. I had to hunt for weeks to find a vendor who would be willing to order me a Lumia 1520. I never even had the opportunity to try one out before my purchase. Few people would be willing to do this. I did it only because I knew Lumia's had good quality and had read many reviews praising the 1520.

The average customer does not do this. Most customers who want a WP cannot find one to purchase and when they do the salesperson immediately directs them away toward an Android or iPhone.

The carriers want to make the most profit possible and it costs them for each phone model they carry. They know that the WP marketshare is small so they do not want to carry WP models because they fear that the profit will not outpace the cost of carrying the model. They might be willing if they get exclusive distribution rights on the phone, that way they can at least get as much of the marketshare as they can, instead of it that small marketshare being split between different carriers, further reducing their profit.

Microsoft can only solve this by making the carriers a deal they can't refuse - pay them big bucks to carry many models of Windows Phones, put MS reps in each carrier store to push WPs, flood the market with quality advertisements showing how useful and fun Windows Phones are. Spend big bucks to develop tons of killer apps for WP that are not on other platforms (at least not at first). And get more manufactures to build Windows Phones - low end, medium, and high-end flagship models.

WPs are great phones, but the average customer does not know this or believe it to be true. They need to be shown and be available for consumers to try before they buy - and MS has to do the showing.

Edited by Curtis Quick, Aug 18 2014, 4:37am :

I wonder how much the numbers for Android and WP would change if they were restricted to first-world countries. Or maybe a graph showing the relation between income and average money spent on a smartphone.

It's not looking good for MS when it comes to WP. Sales are down, Marketshare is down, majority of sales is low end and even stores about carrier salesmen not recommending it. It's bleak for them and maybe the purchase of Nokia was a huge mistake.

It's going to be tough for them to establish themselves in the high end market where all the profits are. Unfortunately I can't see it changing any time soon. It's been several years and nothing exciting came out from WP.

I don't think Microsoft should try to emulate Apple in everything they do. It's fine to have phones at different price points instead of trying to be a "premium" brand that nobody wants to buy (western market) or nobody can afford (developing markets). If they had gone that route, they'd have no market share at all right now, and certainly not as much app support.

Microsoft never was and never will be a premium brand. Microsoft simply wants to be a band that everyone can use. The variety of systems and they offer for different price ranges clearly shows this.. not just now.. it has been like this forever

Nobody seems to sell windows high end windows phones in my city in Canada, its all android or iOS phones, take it or leave it. the only window's phones seem to be in the 200 and under bracket which automatically puts them into the pay as you go phones. I would like to get a high end Window's phone, but as I said, no carriers even want to carry them here. sucks big time.

Brad Bodnaruk said,
.... Canada .....

Same here. I'm in SK, and our local (and best) wireless carrier doesn't even have a Windows Phone in their lineup. I'm relegated to buying outright from Rogers and then doing my own SIM-Unlock via cellunlocker.

This is unfortunate for WP. It was initially positioned for high end devices. Now, they're stuck selling it to poor people. Who would have predicted the average selling price to fall below Android?

This basically shows that Microsoft's strategy of selling a bunch of cheap phones is not working. This strategy is owned by Android devices alone. They need more high end phones to at least attract U.S. consumers.

JHBrown said,
This basically shows that Microsoft's strategy of selling a bunch of cheap phones is not working. This strategy is owned by Android devices alone. They need more high end phones to at least attract U.S. consumers.

I think the problem is that people are not buying high end Windows Phones, its not because there are not enough to buy its because people don't want high end Windows phones. People just don't like Windows Phone much.

It looks like Windows Phone has found its niche with the low end dirt cheap phones.

Other stats show that in Europe where Windows Phone has a higher penetration than 2% its because people have been buying the low end cheap phones. Here I think too that people are just buying a cheap phone and not a 'Windows Phone', they just want a phone they can afford to make calls.

Edited by derekaw, Aug 17 2014, 9:10pm :

derekaw said,

I think the problem is that people are not buying high end Windows Phones, its not because there are not enough to buy its because people don't want high end Windows phones. People just don't like Windows Phone much.

It looks like Windows Phone has found its niche with the low end dirt cheap phones.

Other stats show that in Europe where Windows Phone has a higher penetration that 2% its because people have been buying the low end cheap phones. Here I think too that people are just buying a cheap phone and not a 'Windows Phone', they just want a phone they can afford to make calls.


Exactly. I see people making excuses like "Not enough manufacturers making them". But why would they supply something people simply don't want?

derekaw said,

I think the problem is that people are not buying high end Windows Phones, its not because there are not enough to buy its because people don't want high end Windows phones. People just don't like Windows Phone much.

It looks like Windows Phone has found its niche with the low end dirt cheap phones.

Other stats show that in Europe where Windows Phone has a higher penetration than 2% its because people have been buying the low end cheap phones. Here I think too that people are just buying a cheap phone and not a 'Windows Phone', they just want a phone they can afford to make calls.

Good point.

JHBrown said,
This basically shows that Microsoft's strategy of selling a bunch of cheap phones is not working. This strategy is owned by Android devices alone. They need more high end phones to at least attract U.S. consumers.

Well here in the UK the Moto G and E and Lumia 630/635 are some of the best selling phones. I know this as I check off the high value for our store and that includes mobile phones. Other than the dumb phones, they are the phones I always see coming in.

Gods and Kings said,

Exactly. I see people making excuses like "Not enough manufacturers making them". But why would they supply something people simply don't want?

It will be very interesting to see how sales of the HTC M8 Windows Phone go. It will be a real test about what we have been discussing here. Do people want a high end flagship Windows Phone?

JHBrown said,
This basically shows that Microsoft's strategy of selling a bunch of cheap phones is not working. This strategy is owned by Android devices alone. They need more high end phones to at least attract U.S. consumers.

Actually I think it is showing that the cheap phone strategy IS working, but it's the high end/mid range that isn't working. Windows Phone was designed to run very well on low end phones (I have a $39 Lumia 520 that runs circles around any comparably priced smartphone), but right now there are no high end WPs that interest me. I'd get the new HTC but I'm hearing mixed reviews about the camera so I'm going to have to wait and see. Camera is important to me.

I find it hard to believe that MS got into the phone hardware business to sell dirt cheap low end burner phones. There is no money in that plus customers who buy low end cheap phones don't spend much on services or apps. MS got into this business to be like Apple and it's not working out very well.

If people that bought a low end Android phone would have bought a low end WP their phone experience would be much better. My kid had a Moto G and the experience was less than satisfying. Everything was sooo slooow. Just starting the camera took time and taking a good picture is basically impossible. The camera was never really focusing on the subject properly. Don't get me started on acquiring a GPS signal. She was waiting for 10 or more minutes just so she could check something on the map. We ended up returning it after a couple of days and she is now much happier with her $100 Lumia 635. Everything is so snappy, the camera starts instantly and the GPS signal is always available on an instant. Too bad that not more people are aware of WP and how easy and fast it is even on low end hardware.

londan said,
I don't think I've seen a high end windows phone yet. Maybe when the M8 is out I will have

Actually I had one for two years already.... Lumia 920.

londan said,
I don't think I've seen a high end windows phone yet. Maybe when the M8 is out I will have

There's this thing called a Lumia 930 you know...

None of those are what I would consider high end.
They are all quite "unapologetically plastic" Nokia and the style is the same.

I have a 920 still, but I miss the variety of android. The only reason I've not upgraded is because I'm waiting for a real high end phone

francescob said,
What Apple phones are mid-range? I've never seen any below $500.

Previous generation once new ones are launched.

I've seen many carriers offer $0 iPhone 4 when 4S came out etc.

Considering they haven't put many high end WPs out worth buying, I can see why it's the smallest chunk there.

I wouldn't say "none"... although they definitely haven't put out enough high-end devices that Windows Phone fans keep asking for--that is, a 920 replacement with expandable storage. I mean, there is the Icon... but it's only on Verizon. T-Mobile has no high-end Windows Phones. And most of the high-end phones on AT&T are niche devices--the 1020 & 1520--or two years old (the 920).

Last year, Windows Phone had four things working against it:
1 - Not enough manufacturers making them (not enough variety of phones)
2 - Not enough apps
3 - Not enough flagships on ALL carriers
4 - Carrier salespeople not pushing the brand

Heading into the holiday season, Microsoft seems to have solved #1... and is making steady (and improving progress on #2--the app gap). Numbers 3 & 4 are still serious problems though. Regarding #3... why can someone buy an iPhone or Galaxy from every carrier... but the carriers demand exclusives for Windows Phone? Are Apple & Google putting pressure on them? Either way, that really needs to change. As for #4... if Windows Phone starts to gain some real traction and market share (which is still a big "if") then salespeople might begin to push them. If not, Microsoft needs to pay them some kind of incentive to sell Windows Phones... and, quite honestly, what are they waiting for?

(can't edit my own post) The rest is a healthy reflection of people's wallet size and probably shifted quite a bit on the WP side after budget phones such as the Lumia 520 came out.

DerAusgewanderte said,
that is some silly statistics. Since there are no low-end i-device options this is naturally skewed.

Why? The chart correctly indicates that Apple devices fall in the high segment, the charts for WP and Android, both of which, cover all segments, show the respective penetration in those segments.

DerAusgewanderte said,
exactly....
we did not expect anything other than this outcome....

About Apple yes, but I am surprised by the proportion between the other two OSes in the high end.

TsarNikky said,
That IS an awkward question, but a very legitimate one to ask.

It is but in order to be a meaningful one should also broken down by age.

Syrah said,

Why do you ask?

It matters what phones are more popular in the enterprise but it also matters what platform people are being productive on vs goofing off playing games. I'm sure most of the gaming is done on low end droids.

DerAusgewanderte said,
The rest is a healthy reflection of people's wallet size

How so? Just because someone has a lot of money doesn't mean they need to or have to ###### it away on overpriced items. Far from it. It has been shown that the more educated and successful people are more likely to be smarter with their money.

Nogib said,

How so? Just because someone has a lot of money doesn't mean they need to or have to ###### it away on overpriced items. Far from it. It has been shown that the more educated and successful people are more likely to be smarter with their money.

And we obviously have a lot more uneducated people than educated people as anyone with even half a brain wouldn't spend over $200 fro a (stupid) smart phone, or ANY phone for that matter, especially since most know they aren't even going to have them for more than 2 years!

DerAusgewanderte said,
that is some silly statistics. Since there are no low-end i-device options this is naturally skewed.

Arguably the iPhone 4s (still being sold) is the low-end option.