Thailand’s forgotten backyard sees smartphone boom

rice field thailand

Rice field in Thailand. Image: Heiko S

Thailand’s Northeastern region, which Lonely Planet calls a “forgotten backyard”, has seen the strongest growth in smartphone sales in the first quarter of 2013 compared to the rest the nation, reports research company GfK.

Isaan, well known among tourists for its rice fields, water buffaloes, and silk weaving industry, registered a quadrupling in sales of smartphones in the first 4 months of the year compared to 2012. Conversely, the central and western regions experienced only 17 and 11 percent growth.

Overall, smartphone sales in Southeast Asia’s second largest economy is on the verge of overtaking feature phone sales, jumping from one in five handsets two years ago to 42 percent of overall sales volume in the last 12 months. The Android OS has benefited most from the surge, making up 74 percent of smartphone sales in the first 4 months of 2013 compared to 62 percent a year back.

Although the northeast region has the largest size and population in the country, it is the least developed and has the lowest average income. Low salaries have driven some natives into other parts of Thailand in search of higher wage work, says Wichit Purepong, managing director for GfK Thailand.

However, following the jumpstarting of new industrial estates after the heavy flooding of 2011, the labor force has swelled, driving demand for smartphones since mid 2012.

Purepong adds that smartphones in the northeast region are relatively cheaper, averaging at USD 230, which matches the lower purchasing power of the local population. Smartphones in and around Bangkok, on the other hand, cost USD 300 on average.

Thailand’s smartphone boom, which has resulted in USD 800M spent on smartphones in the past year, jives with what has been happening in Southeast Asia.

According to an earlier GfK report, smartphone sales in the region rose 78 percent year-on-year, although feature phones continue to dominate the market by making up three quarters of the 118 million handsets sold.

That is USD 13.7B worth of phones shifted between July 2011 and June 2012 in Singapore, Malaysia, Thailand, Indonesia, Vietnam, Cambodia and the Philippines.

Much of the demand for smartphones has been fueled by the influx of cheap Android devices, with sales of smartphones averaging in the USD 100 to 200 range. The USD 50 to 100 range has also proven popular in Philippines and Indonesia.

In the years ahead, Thailand and Vietnam are expected to prop up smartphone demand in the region, given their relatively low smartphone penetration rate of 19 and 11 percent.

Eventually, the rising dominance of smartphones could have a knock-on effect on smartphone accessories. Across developed economies in Asia Pacific, improving sales in Android phones have led to an increasing popularity in bluetooth-enabled table audio docks.

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