In the fourth quarter of 2023, the smartphone market in Southeast Asia saw a year-on-year increase of 4%, reaching 23.8 million units. The region started the year on a weak note due to adverse macroeconomic factors and inflation, leading to a significant decline in consumer spending. However, the market rebounded, driven by brands actively launching new products and channel incentive measures, which restored consumer demand for smartphones.
Canalys analyst Sheng Win Chow commented, "Smartphone manufacturers are actively capitalizing on the economic recovery momentum. Samsung retained its lead in the Southeast Asian market with an 18% market share, despite a 17% year-on-year decline. Its strategic shift towards the high-end market has weakened the competitiveness of its lower-end A0x and A1x models against other Android brands. Notably, Transsion ranked second for the first time, capturing 16% of the market share and achieving an astonishing annual growth of 153%, thanks to strong performances in Indonesia and the Philippines, as well as expansion in emerging markets. Xiaomi and OPPO each held 15% market share, with Xiaomi growing 44% year-on-year, while OPPO saw a 27% decline. Xiaomi boosted sales by streamlining its product lineup and offering competitive pricing for its main models, whereas OPPO faced challenges in market competition due to a lack of products targeting the ultra-low-end market, despite improvements in brand promotion through high-end strategy."
Chow added, "After launching numerous high-end and flagship devices early in 2023, most manufacturers shifted focus to strengthening their market share by introducing main models in the fourth quarter. For instance, the price-sensitive Philippine market saw a significant 32% growth. Transsion drove the market revival by increasing shipments of its Smart and Spark series and effectively using social media platforms to promote its Phantom V Flip model. In Malaysia, the smartphone market performed strongly, growing 11% year-on-year, thanks to government incentives encouraging widespread adoption of 5G. However, the recovery of Vietnam's smartphone market was slower than expected, with major distributors like Mobileworld and FPT shifting their investment focus to emerging areas such as AI, presenting a promising opportunity for Samsung, a long-term partner."
Canalys analyst Le Xuan Chiew stated, "Devices priced below $299 continued to drive most of Southeast Asia's market shipments, accounting for 82% of the total shipments in the fourth quarter of 2023. Transsion topped the smartphone shipments for the first time in December. However, intensified price competition and market saturation pose challenges for manufacturers in pricing and positioning their products in this segment. Brands focused on the high-end market, like Samsung and OPPO, may find it difficult to compete directly with the affordable models launched by brands like Infinix, Tecno, Xiaomi, and realme. Instead, their aim is to attract consumers with higher purchasing power through premium channels such as brand stores and telecom partnerships, differentiating beyond price. For example, in Malaysia, Honor expanded its 5G product line through initiatives like the Rahmah program and carrier channels, achieving a 184% year-on-year surge. Following early 2023's challenges, channel partners remain cautious, and manufacturers still face the challenge of balancing device pricing and inventory management."
Canalys forecasts that smartphone shipments in Southeast Asia will grow by 7% in 2024. A surge in shipments in 2021 may lead many consumers to replace their devices in 2024. However, due to high interest rates and inflation, consumers may delay purchasing new devices, making manufacturers cautious about demand forecasts for 2024. The demand for 5G devices, supported by affordable pricing and government policies, has recovered. The growth of 5G devices priced below $300 more than doubled, from 6% in January to 14% in December 2023, and is expected to continue growing in 2024. Manufacturers are increasingly finding it difficult to differentiate in competition. In the long run, AI, ecosystems, and channel optimization will become new drivers of industry development in the region, and manufacturers must innovate to drive consumer purchasing power. Samsung introduced Galaxy AI to implement a differentiation strategy, strengthening its brand image as a market leader and enhancing its visibility in the region through its established ecosystem. The burgeoning Southeast Asian market offers ample opportunities for smartphone manufacturers aiming to expand their influence. Manufacturers need to adapt flexibly and work closely with their channel partners to implement effective measures in response to the rapidly changing market trends. With boosted consumer confidence and the implementation of various strategic measures, Southeast Asia will become fertile ground for growth and innovation in the smartphone industry.