Surprise slowdown in smartphone demand in Indonesia

Research firm Counterpoint just released its Q3 2015 report on Indonesia’s phone market. Here are some key findings.

Evercoss toppled by old king Samsung

It was a brief reign for local phone maker Evercoss. In Q2 2105 things were looking bright for the company. For the first time, it overtook Samsung in terms of overall mobile phone shipments in Indonesia.

Samsung rules again this quarter.

But now in Q3 2015, Samsung is back on top, according to Counterpoint’s report. Samsung has traditionally done well in Indonesia with its top and mid-tier smartphones. It recovered this quarter, especially with its mid-tier J-series, the report finds.

For now, Evercoss’ strategy to keep up its feature phone sales while slowly introducing its own brand of smartphones doesn’t seem to be catching on.

See: Indonesia’s ‘king of feature phones’ wants to copy AirAsia to beat Samsung

4G LTE continues to grow

Indonesia began rolling out 4G LTE across the archipelago mid-year. People seem to be adopting them quickly, with shipments crossing more than a million units for the second successive quarter, the report states.

One local operator and phone maker, Smartfren, was particularly apt at jumping on this opportunity, climbing up to third spot in the smartphone segment. The operator has a number of 4G LTE devices in its portfolio.

Surprise drop

But overall, there was a 7 percent decline in smartphone demand compared to last year.

Indonesia is now at smartphone penetration of about 40 percent. This means there’s still ample opportunity for people to make the switch from a basic feature phone to a more advanced model. It’s different in China, where about 90 percent of the population is said to be in possession of a smartphone. Nearing “peak smartphone,” slowdown in demand can be expected.

Indonesia’s far from it, so why aren’t more people buying smartphones? It could be they are still too expensive for many people. Let’s not forget about 40 percent of Indonesia’s population remains clustered around the national poverty line. Tech minister Rudiantara reiterated his wish that smartphone prices continue dropping in the next three years, especially those of 4G handsets so that fast internet becomes accessible to larger segments of the population.

See: Soon everyone will be able to afford a smartphone. But what about data?