Why High-End Smartphones Do Not Lead the Southeast Asia Market

The smartphone is now slowly becoming a necessity for consumers, and research firm GfK thinks that Southeast Asia is the driver of its global growth. In terms of the smartphone market, we have seen Apple and Samsung smartphones take the lead and battle against each other in Southeast Asia for quite some time. But it looks like this growth does not belong to Apple or Samsung, anymore.

Why is that so? Michael Morgan, analyst at ABI Research says in an interview with Bloomberg, that “the days of great growth in the high end of the market are gone.”

Smartphone numbers

This analysis speaks very well of what’s happening in the Southeast Asian market. In March, GfK reported that the sale of smartphones in Southeast Asia grew by 61 percent. And of this number, it is notable that the Philippines is the fastest growing market during that period. And we have also reported that Thailand sold almost 3 million smartphones earlier this year.

But this huge boost in sales, according to Gerard Tan, account director for Digital World at GfK Asia, is “primarily driven by affordable smartphones which averaged in the price range of $100 to $200.” He adds:

The rise of local brands in countries such as Philippines and Indonesia has resulted in the growing market share of those in the $50 to $100 price segment—the budget price range which bridges the transition from basic mobile phones to smartphones.”

It is no wonder that the current lagging of revenue growth by high-end smartphones is somehow driven by the SEA market, which represent a huge chunk of the global market.

New leading smartphones

Late last year, we reported that Android still leads in SEA in terms of operating system’s adoption. It looks like this is being pushed by the presence of a growing number of manufacturers who carry the Android-powered devices at a lower cost in the region. Looking at some of the countries in SEA, the Philippines has a number of local manufacturers carrying dual-core to quad-core Android smartphones in the $50 to $100 price range, like,  Cherry mobile, MyPhone and CloudFone. In Indonesia, telco Smartfren is also aggressive in pushing low-cost Android devices in the local market. And even China-manufactured devices such as Huawei and Lenovo are tapping these markets already.

In February, Apple Insider predicted that Apple will launch a low-cost phone later this year in countries such as India. If this holds to be true, we could only wait if this new strategy of Apple will work in the Southeast Asian region.

(Source: Bloomberg)

(Editing by: Anh-Minh Do and Steven Millward)