Up from 25 per cent this year.
Chinese OEMs ZTE, Huawei and Lenovo entered the smartphone market with low-end devices, but have since announced plans to tackle the high-end market.
However, analyst Canalys reckons China's smartphone shipments will be increasingly driven by sub-$200 models, rising from 25 per cent this year, to account for 40 per cent of the market within the next three years.
Meanwhile, the local OEMs are expected to face increasing pressure from the likes of Alibaba and Baidu, both of which started out as online search engines before breaking into the phone space – similar to Google.
Nicole Peng, Canalys research director for China, said: "Price erosion is accelerating. New low-cost models, such as the Lenovo A65, have come to market at around RMB700 (US$110). In Q4 last year, devices with a similar specification were priced around RMB1,000 (US$158).
"Established mobile phone makers, such as Yulong, Gionee and K-Touch, have the advantages of strong operator relationships and channels. In addition, emerging vendors, like Xiaomi and Green Orange, are building a reputation quickly in the youth market."