Global smartphone shipments will hit 1.7 billion in 2017, driven by interest from emerging markets, predicts a new report by Ovum.

The research firm says 450 million smartphones were sold in 2011, of which sales of about 160 million came from emerging markets, equivalent to around 35 percent of the total.

The report also outlines the importance of China's contribution to smartphone sales. In 2011, it accounted for 66 percent of the total sold in emerging markets.

By 2017, China and other leading markets might have driven sales to the point where smartphones account for 57 percent of all devices sold in emerging markets.

Unsurprisingly the handset industry has responded by producing ever-cheaper smartphones. The report points to a nascent sub-US$100 category opening up, although cautions that affordability still remains a big issue most emerging markets. Operator subsidies are uncommon in such markets. Affordability is more driven by the reference design strategy of the likes of Mediatek and Qualcomm.

Author Shiv Putcha says handset vendors in China are still in the lead when it comes to developing low-cost smartphones for their home markets, but vendors in countries such as India and Indonesia, Brazil and Russia are adopting the same model, which should have a positive effect on growth.

In China, "adjacent players" such as Baidu and Alibaba are entering the smartphone market, usually by developing OSes based on Android. Such companies are customising Android to fit their own purposes, so evolving it into a distinctive OS which can create tensions with Google, as Alibaba recently found with its Aliyun OS.

Ovum’s report predicts that increased sales of smartphones in emerging markets will enable greater use of online services such as cloud, storage and mobile money. OEMs and equipment vendors might choose their moment to move into services.

However, says Ovum, mobile operators will struggle to gain traction with white-label devices, as they attempt to move from services into the equipment side of the market.