Good enough is the enemy of great
Cheap smartphones appear bound to make inroads, as soon as they are good enough for what most (young) people do with their phones. That's essentially messaging, relatively simple games, and, er, phone calls. Watching videos would be a fourth point if enough bandwidth was available everywhere. Now, last year's mid-market phones are perfectly good for that sort of things, and they will be next year's cheapo phones.
Translation for IT people: Most customers don't even need the latest tech. They just need good enough tech specs, and will then go for cheapness and, surprisingly, ease of use.