Smartphone shipments are expected to reach 1 billion annually by 2016, up from 302 million in 2010, per a new  study by Juniper Research.

In order for the smartphone market to grow, the Juniper predicts that price points must come down, specifically to a retail price $150. The study also shows that handsets that can morph into other devices will see a particular increase.

?Currently there are only one or two smartphone companies that are under the retail price point of $150,? said Daniel Ashdown, research analyst at Juniper Research, Hampshire, England.

?In order for the smartphone market to grow, price points must come down for consumers,? he said.

Lower costs
The study broke down smartphones into three price areas ? premium, standard and economy.

Premium smartphone costs account for $400 and above.

Standard devices are  priced $151 to $399.

Economy smartphones are priced below $150.

?Smartphones are quickly becoming the go-to source for consumers, but a lot of people still can?t afford them,? Mr. Ashdown said.

?More importantly, people in the market want the functionality of smartphones, but not the price,? he said.

Based on the need for more cost-effective handsets, Juniper predicts that there will be  the largest growth with the economy group.

The study also shows that by 2016, one-third of smartphone shipments will have a unsubsidized price of $150 or less.

In addition to lower prices, the economy group will also see a boost in features that consumers typically only attribute to higher-end smartphones, including NFC, 3D and biometrics.

?We?re seeing a shift in interfaces and a larger proportion of phones with touch screens, which will equal out the handset playing field,? Mr. Ashdown said.

According to Mr. Ashdown,  devices with key sets will soon fade out in the market.

Multi-purpose devices
Juniper expects an increase in the market with handsets that double as other mobile devices.

?Consumers are looking for products that can do multiple things, and there?s been an increase in smartphones that are versatile enough to function for multiple purposes,? Mr. Ashdown said.

The double-duty devices include features such as gamepads, tablets and netbooks.

The increase in devices that function with more rich and interactive features signals a change in consumer mobile behavior.

Consumers are gradually becoming more  connected to their mobile devices for a multitude of purposes.

?Premium smartphones are a competitive market and differentiations that let phones change functions will be a key factor in the future,? Mr. Ashdown said.

?Carriers need to find links that make mobile devices more accessible to consumers, which includes lower prices and increased phone features,? he said.

Final Take
Lauren Johnson is editorial assistant on Mobile Marketer, New York