- The premium segment witnessed a 22% QoQ increase in shipments in the Southeast Asian market
- An increase in demand and new launches played a significant role in the quarterly push
- Tourism surged with the fading of the pandemic and contributed to the rebound
- Increased focus on sustainability in the form of trade-ins, refurbished smartphone demand and corporate ESG initiatives is seen: Report
Key Southeast Asia (SEA) smartphone markets—which include Indonesia, Thailand, Philippines, Vietnam, Malaysia, Singapore, Myanmar and Cambodia—saw a significant QoQ growth in the shipment of entry-level smartphones in Q4 of 2022. On the other hand, the region underwent a YoY drop of 13% in the whole year. A recent report from Counterpoint suggested that inventory was still high in countries like Indonesia, the Philippines and Thailand, which led to a 17% YoY drop in shipments in Q4 2022.
Although the region’s smartphone shipments declined in 2022, Counterpoint mentioned that countries like Vietnam and the Philippines showed more resilience to economic factors than others. It added that mature markets like Thailand and Singapore concentrated more on 5G penetration and further stages of industrial 5G applications.
As an uptick in trade-ins, refurbished smartphone demand and corporate ESG initiatives were reported, it suggested that sustainability is becoming a new focus point.
As per the report, IT and e-commerce sectors saw job cuts in SEA which did not project a healthy H2 2022. It said that even the online smartphone channels contributed relatively less in seasonal campaigns like 11.11 and December sales. At the same time, it added, OEMs, operators and retailers have been increasing offline networks across geographies.
With companies leaving China, the region stands to witness more manufacturing hubs mushrooming. Counterpoint noted that countries like Vietnam stand to benefit from increased investments from companies looking to diversify from China. Further, as smartphone penetration is revolutionizing the digitalisation process in the region, progress is much hoped for. Also, foreign direct investment is expected to further show an upward trend. The report concluded that with all macro factors remaining constant, H2 2023 has the potential to make up for H1’s losses.
Senior Analyst with Counterpoint, Glen Cardoza commented, “Southeast Asia suffered on multiple fronts in 2022. Countries continue to increase interest rates, inflation is still a factor and trade volumes are dependent on the partner country’s demands. Any macro-level improvements in tourism, government relief and financial management will take time to positively impact the common consumer. In the absence of further adverse macro effects, the region is on a path to recovery. OEMs are however pessimistic about the recovery at this point and it is visible in their shipment levels. Improving entry-level smartphone shipments is a much-needed boon at this point. H1 2023 is likely to suffer the effects of low shipments, but we are likely to see a steady increase in shipments starting Q2 2023.”
According to the research, industrial and consumer 5G use cases will be seen in countries like Singapore and Thailand, while Indonesia and the Philippines will concentrate on 5G penetration more than others.
Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry.