Despite international smartphone vendors actively developing the entry-level segment, judging by current market conditions, consumers continue to be more receptive to functionally more advanced devices at higher price points, according to industry sources.

Many international brand vendors have since slowed their efforts for entry-level products and are refocusing on the medium-to-high-end segments, the sources said. With telecom carriers offering generous subsidies for smartphones and introducing data plans that act as installment payment schemes, most consumers can afford smartphones that would otherwise cost up to NT$20,000-30,000 (US$687-1,030).

As telecom carriers exert more control over the handset sales channel, they will continue to promote more advanced devices. Most users that purchase low-end smartphones often use the products as conventional feature phones, which mean less data service access and lower average revenue per user (ARPU).

The preference of high-end smartphones is not only occurring in developed markets, but emerging markets as well, the sources said. Though, vendors are still bullish on the entry-level segment, for now, most are placing more emphasis on devices with larger screens, higher resolutions and faster computing capability.

Though smartphone prices have come down as the market expands, the mainstream is still devices of around US$400-500, and the US$500 or above segment is seeing very strong sales. Perhaps to increase their presence in the entry-level segment, international vendors need to bring pricing below US$150, but this piece of the pie is currently dominated by China's white-box makers and companies such Huawei and ZTE.