While End-user spending on mobile phones is on track to reach nearly $400 billion in 2017, an increase of 4.3 percent from 2016.

"Across the world, the device market is becoming less price-sensitive," said Ranjit Atwal, research director at Gartner. "Consumers and businesses are seeking better products that suit their lifestyles, rather than just opting for the cheapest products."

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"The increased average selling price (ASP) for mobile phones was driven by users across the board," said Annette Zimmermann, research vice president at Gartner. Adding that, "they are replacing their basic phones with better-quality and more feature-rich basic phones, due to improved product portfolios from rising vendors such as Huawei and Oppo. In emerging markets, the majority of users are upgrading to better basic phones as the leap to premium phones remains out of reach for most."

The report says that greater availability of basic phones from Chinese vendors such as Oppo, BBK, and Huawei increased the basic-phone ASP by 13.5 percent in 2016. It is on track to rise by 4 percent in 2017.

"We expect users to continue to look for higher-value phones this year, which will lead to another rise in ASP," Zimmermann added.