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Cheaper phone market gets more crowded with OnePlus, Moto

The new low cost smartphone of Motorola, 'Motorola Moto G'.
Nelson Almeida | AFP | Getty Images
The new low cost smartphone of Motorola, 'Motorola Moto G'.

The cheap end of the global smartphone market is getting even more competitive.

On Tuesday, Lenovo-owned Motorola unveiled three new devices: the Moto G, the Moto X Play and the Moto X Style. The Moto G's starting price is $179 without a contract. The company will reveal the prices of the two Moto X models in the coming weeks, according to The Associated Press.

And on Monday, Chinese phone maker OnePlus introduced its latest device, the OnePlus 2, with a starting price tag of $329 without a two-year contract.

"Increasing competition is something that can't be ignored," Dan Ives, an analyst at FBR Capital Markets, told CNBC.

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"That being said, it's going to be very difficult for these lower-end competitors to really move the needle for the likes Apple and Samsung," Ives added. "Their market share is iron clad in terms of their base."

While analysts agreed that Apple's ecosystem of computers, tablets and other services keeps it relatively insulated from lower-cost phones, others felt that Korean giant Samsung might not be quite so secure.

"Samsung is getting undercut by other competitors in terms of specs and price points," Alex Gauna, a technology analyst at JMP securities, said. "I think [Samsung] is the one that really needs to watch out."

Some of the competitors weakening Samsung include Chinese phone maker Xiaomi as well as Motorola, he said. "What Lenovo is trying to do is penetrate the top-tier smartphone markets like North America, and Motorola gives them that access."

"Apple will continue to gain share in this market and these phones will not change that," said Gauna.

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Meaning for low-end price point phones

Carolina Milanesi, chief of research and head of U.S. business at Kantar Worldpanel, said the impact of the additions these new models will have in the lower-end smartphone space will vary from market to market.

"In mature markets the Moto G certainly offers a very interesting price point for prepay but in emerging markets competition is tougher due to the low-end devices that Chinese white box vendors are bringing to the market," Milanesi said in an email.

"Pressure will be [on] for tier-one vendors like Samsung, LG, Huawei as they all have a portfolio that covers similar price points," Milanesi added.

Neither Apple nor Samsung immediately responded to a request for comment from CNBC.

Disclosure: JMP Securities currently makes a market in Apple. JMP expects to receive or intends to seek compensation for investment banking services from Apple in the next three months.

FBR acts as a market maker or liquidity provider for Apple.