News Column

Saturated mobile phone market sees a contraction

June 9, 2014

By Suchit Leesa-nguansuk, Bangkok Post, Thailand

June 09--Thailand's mobile phone market is likely to see a contraction for the first time this year thanks to the prolonged political strife and saturated market.

In addition, the country slipped down a spot in this year's ranking of the smartphone top growth market in Southeast Asia, dropping to the third largest market in terms of sales growth, behind Indonesia and Vietnam.

Apinya Sermchuvitkul, a telecom analyst at GfK Retail and Technology (Thailand), said the company anticipates sales of mobile handsets will reach 17-18 million units this year, compared with 20.9 million in 2013, which increased by 18% from 2012.

Nonetheless, the smartphone market would grow by 10% this year to 13.98 million units, a jump from 10.1 million units in 2013.

Ms Apinya said GfK expects a lower forecast as the total local mobile phone market contracted by 3% in the first quarter compared with the same period last year, and contracted 7% since November 2013 due to the political crisis and economic slowdown.

The local smartphone market grew 33% in the first quarter. More than half the revenue of the total mobile handset market came from smartphones, making up 63% for the first quarter, with basic feature phones accounting for the rest.

Ms Apinya said there are only two segments in the smartphone industry that will continue to grow this year. The first can be categorised as smartphones priced below US$100, an affordable alternative for users planning to switch from basic feature models to full functioning 3G handsets.

Although the growth of the more-economical smartphone market is only around 20% this year, it allows new IT manufacturers like original equipment manufacturer (OEM) Chinese brands to make forays into the market.

The other segment is mid-priced smartphones, selling at 7,500-12,000 baht, serving the replacement market.

Sales of smartphones in Southeast Asia hit 18 million units in the first quarter, with a combined value of $2 billion.

"The demand for mobile handsets in Southeast Asia is stabilising as indicated by the slim 2% growth in sales, compared with last year," said Gerard Tan, accounts director for digital world at GfK Asia. "But the smartphone market grew by 43% in terms of units and 25% in terms of value."

Indonesia, the largest mobile phone market in Southeast Asia, bought more than 7.3 million units, accounting for two-fifths of the region's market.

"The intensified penetration in Thailand and Vietnam was likely driven by the 3G launch last year, which served as a catalyst tipping consumers in these two countries towards the smartphone segment," said Mr Tan.

Phablets ? large smartphones with a screen size over 5.6 inches ? have become increasingly popular with over 1.1 million units worth a total of $567 million sold, with Malaysia and Indonesia being the biggest markets for this sector.


(c)2014 the Bangkok Post (Bangkok, Thailand)

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Source: Bangkok Post (Thailand)

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