Global smartphone shipments surpassed 1bn last year for the first time, driven by demand for cheaper devices that contrasted with slowing growth at the market’s higher end, writes Simon Mundy.

IDC, a technology research group, estimated that smartphone shipments in 2013 rose to just over 1bn – a 38 per cent increase from the previous year and double the 494m recorded in 2011. But the report will do little to reassure investors in the two biggest manufacturers Samsung Electronics and Apple amid concerns that margins for both could shrink as low-cost handsets account for a rising share of smartphone sales.

“Cheap devices are?.?.?.? the portion of the market that is driving volume,” said Ryan Reith, mobility research director at IDC. “Markets like China and India are quickly moving toward a point where sub-$150 smartphones are the majority of shipments.”