2degrees' chief executive Eric Hertz says smartphones could be selling for less than $100 in 12 months' time and within the reach of "value-conscious" consumers.

Hertz said the drop in price would depend on the global penetration of the phones, but guessed they could fall as a low as $100 in a year's time.

"Customers will shift [from feature phones] when there is a sub-$100 smartphone," he said.

Smartphones are devices with advanced computing power and typically have features such as WiFi connectivity, integrated GPS and mobile broadband access.


Hertz said that in 12 months' time, the price of mobile data will also be low enough so that "value-conscious prepay customers" will be happy to pay for it.

The cheapest smartphone being sold by 2degrees is $249, according to prices on the company's website.

The mobile provider announced today that it has entered into a distribution deal with more than 86 Warehouse stores nationwide.

"[The deal] gives us an important additional place where people can buy 2degrees products...[the Warehouse] has a footprint we could never match," Hertz said.

Hertz said he expects the majority of sales in Warehouse stores will be on the more traditional "feature" mobile phone, rather than smart devices.

"If you're coming up with the best-value, [feature phones] are still going to be the lowest priced phones in the market I think for a year or so. So I think we'll still see a lot of volume there for the highly-price conscious. If you go into the Warehouse, you're really going for the best value."