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TECNO, Infinix, Apple Fastest-growing Smartphone Brands in Southeast Asia

Southeast Asia’s smartphone shipment volumes declined 2% YoY but increased 3% QoQ in Q3 2023, signaling a recovery in the region’s smartphone demand.
The fastest-growing brands were TECNO (148%), Infinix (42%) and Apple (19%). All three Transsion brands collectively grew by 62% YoY in Q3 2023.
Samsung led the market with a 21% share, followed by Xiaomi (17%) and OPPO (15%).
Indonesia and Thailand saw flattish growth while other SEA countries like the Philippines, Malaysia and Vietnam declined YoY.
5G smartphones captured 36% of overall shipments in the region.

Jakarta, Hong Kong, London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – November 9, 2023

Southeast Asia’s smartphone shipments declined 2% YoY but increased 3% QoQ in Q3 2023, signaling a recovery in the region’s smartphone demand, according to Counterpoint Research’s Southeast Asia Monthly Smartphone Channel Share Tracker. Stronger macroeconomic indicators, aggressive new OEM launches and aggressive promotions by OEMs and other platforms were the main growth contributors. Also, an uptick was seen in the replacement cycles of consumers opting for low-to-mid-tier smartphones. TECNO, Infinix and Apple emerged as the fastest-growing brands during the quarter.

Most key SEA countries like Indonesia, Malaysia, Philippines and Vietnam showed a double-digit decline in Q2 2023, but they improved in Q3 2023, hinting a relief for OEMs ahead of an important festive quarter. However, on an annual level, we foresee a YoY decline of about 8% for the region in 2023.

SEA remains an important market for the tech ecosystem due to its underpenetration in many areas, like online banking, e-wallet usage, online shopping and overall internet usage.

Source: Counterpoint Research Southeast Asia Monthly Smartphone Tracker, September 2023

Key country insights

Indonesia and Thailand saw flattish growth in smartphone shipments while other key SEA countries like the Philippines, Malaysia and Vietnam declined YoY.
In Thailand, the new government launched several initiatives, such as delaying debt payments, lowering energy prices and offering cash handouts, to ease the citizen’s cost of living. This brought immediate effect on commodities. Besides, in September, the government announced visa-free entry for tourists from China and Kazakhstan, bringing much relief to the country’s COVID-hit tourism industry.
In Indonesia, OEMs launched several new models in the middle and end of September. The new launches made up a big share of the overall shipments. During the quarter, Indonesians preferred to wait and watch when it came to spending money. The country is gearing up for its legislative and presidential election in February 2024. We expect Q4 2023 to see more smartphone sales due to aggressive offers.
Vietnam’s economy has picked up with its exports coming back on track. GDP grew 5.33% in Q3 2023, beating expectations. Foreign investment is expected to rise with Vietnam entering strategic partnerships during the prime minister’s visit to the US in September.
In the Philippines, the economy is showing signs of recovery. Consumer confidence has improved. Unemployment is a concern and essentials are still expensive for low-income families. Due to easing inflation, the coming months might see increased household spending. Overall, the household expenditure levels might take some time to recuperate, which might affect smartphone purchases.
In Malaysia, industrial manufacturing is still slowing down due to weaker demand for electrical and electronic products. Weaker exports have added to the decline in GDP as well. Malaysia’s 5G connectivity and penetration are improving now but the overall industry is being affected by China’s economic headwinds.

Source: Counterpoint Research Southeast Asia Monthly Smartphone Tracker, September 2023

Key OEM insights

Beating the trend, Apple’s shipments increased by 19% YoY during the quarter. Apple is still seeing a strong demand for the iPhone 13 and 14 series, adding to the demand for the newly launched 15 series.
Samsung led the market with a 21% share. Its A05 series has entered the market, adding to a strong overall A-series presence. Premium models like the Z Flip 5 and Z Fold 5 along with the S series are contributing as well. Promotions for the brand are centered around these premium models not only in countries like Thailand and Vietnam but also increasingly in countries like Indonesia and the Philippines. This is due to premium smartphone purchases by well-to-do consumers who are least affected by current headwinds. Samsung was the top brand in Indonesia, Thailand and Vietnam in Q3 2023.
Xiaomi’s shipments grew 7%. Its Redmi 12 series has been doing quite well across all key SEA countries. Its promotions and new model launches were also better than most other brands during Q3 2023, which helped the brand increase shipments. Xiaomi was the top brand in Malaysia in Q3.
Transsion witnessed the highest growth during the quarter. Infinix grew 42% YoY, TECNO 148% and itel witnessed a 17% growth. Infinix and TECNO are offering strong base specifications along with a varied model portfolio.
realme saw flat growth during Q3 2023. It was the top brand in the Philippines.

Commenting on brand dynamics in Q3 2023, Senior Analyst Glen Cardoza said, “Samsung and Xiaomi have been able to market their models in a much better manner across all key SEA countries, while sustaining new launches across price ranges, compared to the limited options from brands like OPPO and vivo. Upcoming brands are making a mark as well. Among them, the Transsion brands lead. TECNO and Infinix have either sustained or increased their new model launches, all in the entry to mid-tier segments. The three Transsion brands collectively grew 62% YoY in Q3 2023.”

While 5G penetration still has some way to go in countries like Indonesia, Vietnam and Malaysia, 5G is increasingly becoming a key consideration for consumers. Many consumers want their phones to be 5G ready. During Q3 2023, 5G smartphones captured 36% of overall shipments in the region.

The region’s key macroeconomic parameters like China-ASEAN trade, startup funding and foreign direct investment continue to see YoY declines. Add to this a recovering tourism industry. This has led to low GDP levels across most SEA countries. Price-conscious consumers have waited all year for the situation to get better, spending the least on discretionary items. On the positive side, digital transformation continues even as the industry recuperates slowly. This means that we can expect a better Q4 of 2023.

* Key Southeast Asia countries/markets include Indonesia, Thailand, Philippines, Vietnam and Malaysia.

Feel free to contact us at press@counterpointresearch.com for questions regarding our latest research and insights.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

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Meet Counterpoint at ZTE 5G Summit & Analyst Conference 2023

Counterpoint Research is attending 5G Summit & Analyst Conference 2023

Our Associate Director, Gareth Owen will be attending the 5G Summit & Analyst Conference 2023 at Bangkok, Thailand. You can schedule a meeting with him to discuss the latest trends in the technology, media and telecommunication sector and understand how our leading research and services can help your business.

When: 14th & 15th November 2023

Where: Bangkok, Thailand

About the event:

The 5G Summit & Analyst Conference aims to bring together a gathering of influential thought leaders, pioneers, and like-minded individuals who share a passion for harnessing the potential to shape a brighter future. The theme for this year is ‘Embrace the Digital Nexus’.

Click here (or send us an email at contact@counterpointresearch.com) to schedule a meeting with them.

Apple Shines in a Declining Southeast Asia Smartphone Market

Smartphone shipments in Southeast Asia’s five key markets* declined 13% YoY in Q1 2023.
Apple’s shipments increased by 18% YoY during the same period.
Infinix witnessed a 41% increase as the brand grew across SEA markets.
While mid-to-high-end ($201-$600) ranges suffered the most, the >$600 range shipments increased by 4%.

Jakarta, Hong Kong, London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – May 15, 2023

Smartphone shipments in Southeast Asia’s five key countries (Indonesia, Thailand, Philippines, Vietnam and Malaysia) fell 13% YoY due to low demand and a seasonal drop, according to Counterpoint Research’s Southeast Asia Monthly Smartphone Channel Share Tracker.

All key SEA countries saw a decline in Q1 2023 but some more than others. Countries like Vietnam received relatively more shipments in Q4 2022 and so OEMs felt the need to reduce volumes in Q1 2023. Consumer sentiment has not completely revived in Vietnam. Factors like a 10% fall in Samsung’s production, seasonally low smartphone demand after Q4 2022, and reduced revenues for OEMs and operators were also among the driving factors. Indonesia and Thailand did comparatively well than the other countries as demand started improving in March 2023.

Source: Counterpoint Research Southeast Asia Monthly Smartphone Tracker

All key SEA countries are coming out of the geopolitical effects from last year while still reeling under some inflation effects. For instance, the Philippines suffered high inflation at the start of this year. However, operators continue to remain aggressive on 5G development and partnerships with tech companies. The industry has resumed its earlier levels of advancement as foreign investments are again entering big economies like Indonesia and Malaysia. There are collaborations happening on the financial services front as well. For example, OPPO in Indonesia is partnering with banks to provide banking services while AIS, the leading operator in Thailand, has partnered with Bangkok Bank to provide financial services on digital platforms. Consumers are not exactly feeling the improvements on the ground though. Most smartphone purchases are being delayed.

Source: Counterpoint Research Southeast Asia Monthly Smartphone Tracker

Vietnam is a growing Apple iPhone market. The demand for the iPhone 13 and 14 series was good in Q1 2023. Indonesia has seen growth in iPhone shipments as well. Overall, iPhone shipments grew 18% YoY in Q1 2023.

Infinix is the official smartphone partner for Mobile Legends professional league in the Philippines. Infinix has improved on promoting itself as a gaming brand in the region. Overall, though Infinix’s volumes are not on a par with the top brands, it continues to grow in the region. The brand grew 41% in Q1 2023.

While certain brands have been in focus at the start of this year, the price range share favored two consumer groups in Q1 2023. <$200 smartphones witnessed a 4% YoY growth despite an overall decline in volumes. Since entry-level phone shipments had been consistently low, pent-up demand motivated higher shipments in Q1 2023. However, not all countries saw a spike in low-end smartphone demand. OEMs in Vietnam were still looking to push these volumes. The Philippines’ low-income families are reeling under high tax and inflationary issues, restricting low-end smartphone purchases. Premium-end (>$600) smartphone shipments continued to rise and saw 4% YoY growth. Mid-to-high-end ($201-$600) smartphone shipments suffered the most across the region.

Commenting on the SEA economies in 2023, Senior Analyst Glen Cardoza said, “Southeast Asia is at a stage where different consumer types are behaving in a different manner. Low-end smartphone buyers are recovering but they are not just there yet. Mid-to-high-end smartphone buyers are holding on to their wallets and extending the ownership of their phones, while high-to-premium smartphone buyers are unaffected by the economics of the situation. These consumers are going out and choosing to buy the S series, foldables and iPhones. While 5G is becoming a norm, operators are coming out with creative packages and providing options for all types of smartphones. The coming months are likely to see a bit more improvement in consumer sentiment while governments make sure that their countries remain largely unaffected by global macro issues.”

The Vietnamese government is looking to commercialize 5G in the country this year. This will facilitate a new level of manufacturing and consumer usage if done earlier than later. While the Malaysian government and industry work on 5G commercialization and the terms for it, consumers are already equipped with 5G smartphones.

With an increase in tourism in SEA countries earlier in the year, there is a chance that tourism business and revenue will increase this year. Countries like Thailand are also concentrating on eco-tourism initiatives that focus on sustainability, all through smartphones. All these developments are likely to spell normalcy for the public, leading to a likely improvement in consumer sentiment in the coming quarters.

* Key Southeast Asia countries/markets include Indonesia, Thailand, Philippines, Vietnam and Malaysia.

Feel free to contact us at press@counterpointresearch.com for questions regarding our latest research and insights.

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Glen Cardoza

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Electric Vehicles Gain Ground in Southeast Asia; Thailand Dominates Volumes

Thailand led the region’s passenger EV sales in 2022 with a 58% share.
Nearly two in three EVs sold in 2022 were BEVs.
Wuling’s newest model Air EV was the region’s bestseller.

New Delhi, London, San Diego, Buenos Aires, Hong Kong, Beijing, Seoul – March 31, 2023

Passenger electric vehicle (EV*) sales** in Southeast Asia (SEA^#) accounted for just under 2% of the region’s total passenger vehicle sales in 2022, according to the latest research from Counterpoint’s Global Passenger Electric Vehicle Model Sales Tracker. Thailand was the most advanced, accounting for 58% of the region’s EV sales, followed by Indonesia and Vietnam. Thailand’s government has been pushing EV sales through demand-side incentives and corporate income tax incentives for EV manufacturers.

Wuling’s Air EV was the best-selling model across the region in 2022, being one of the most affordable EV options. In terms of automotive groups, Vingroup led the SEA EV sales, closely followed by Wuling (part of SAIC-GM-Wuling group) and Volvo (Geely Holdings subsidiary). Battery EVs (BEVs) represented 64.6% of the total EV sales while plug-in hybrid EVs (PHEVs) constituted the rest.

Commenting on the market dynamics, Research Analyst Abhilash Gupta said, “Passenger EV demand is increasing gradually across the SEA region but sales are tiny compared to global EV sales, constituting just 0.5% of the global total for 2022. However, as geopolitical tensions are rising between China and the West, SEA is becoming an attractive option for Chinese auto manufacturers looking to expand abroad. Therefore, we can expect to see more production plants in SEA in the longer term, which will help boost EV sales. Thailand has the largest auto manufacturing sector in SEA. It is aiming to leverage its manufacturing expertise to attract automakers to produce and sell EVs there. Indonesia and Vietnam have the advantage of mineral resources, which gives them an edge over others in the region. The SEA countries have set lofty EV targets and have introduced many incentives to promote EV adoption among consumers and to attract EV manufacturers to set up bases.”

Source: Counterpoint’s Global Passenger Electric Vehicle Model Sales Tracker, Q4 2022

Commenting on the market outlook, Senior Analyst Soumen Mandal said, “Although EVs are currently a niche market in SEA, we do expect their sales to double in 2023. However, it will be difficult for the SEA countries to achieve their EV targets and increase the share of renewables in the electricity grid at the same time.

SEA countries have the opportunity to display their manufacturing capabilities and grow, given the interest of many international auto manufacturers to invest in the region. Those that enter the market early will have an edge, allowing them to secure a substantial share of the market. The SEA region could adopt the approaches taken by China and Europe, which provide incentives based on CO₂ emission levels. Doing so would encourage both consumers and manufacturers to shift towards more environment-friendly vehicles.”

*For EVs, we consider only BEVs and PHEVs. This study does not include hybrid EVs and fuel cell vehicles (FCVs).

**Sales refer to wholesale figures, i.e., deliveries from factories by the respective brands/companies.

^#SEA includes Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

The comprehensive and in-depth ‘Global Passenger Electric Vehicle Sales Tracker, Q1 2018-Q4 2022’ is now available for purchase at report.counterpointresearch.com.

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

Background

Counterpoint Technology Market Research is a global research firm specializing in products in the TMT (technology, media, and telecom) industry. It services major technology and financial firms with a mix of monthly reports, customized projects, and detailed analyses of the mobile and technology markets. Its key analysts are seasoned experts in the high-tech industry.

Analyst Contacts

Abhilash Gupta

Soumen Mandal

Brady Wang

Peter Richardson

Counterpoint Research

press@counterpointresearch.com

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Thailand Leads Southeast Asia EV Market With 60% Share

Southeast Asia’s electric vehicle sales grew 35% YoY in Q3 2022.
The top five brands accounted for almost 67% of the region’s passenger EV sales.
The sales are expected to cross 3.5 million units by 2030 at a CAGR of 124%.

New Delhi, London, San Diego, Buenos Aires, Hong Kong, Beijing, Seoul – December 21, 2022

Passenger electric vehicle (EV*) sales** in Southeast Asia (SEA)^# grew 35% YoY in Q3 2022, according to the latest research from Counterpoint’s Global Passenger Electric Vehicle Model Sales Tracker. Thailand registered the highest EV sales volume in the region, capturing almost 60% share, followed by Indonesia and Singapore. Battery EVs (BEVs) constituted 61% of the sales and plug-in hybrid EVs (PHEVs) the rest. The top five brands accounted for almost 67% of the EV sales in SEA. Wuling emerged as the best-selling EV brand followed by Volvo and BMW.

Commenting on the market dynamics, Research Analyst Abhilash Gupta said, “Although the passenger EV sales in SEA are small compared to other regions, the demand is gradually increasing. Currently, EV sales are just a tad over 2% of total passenger vehicle sales in the region. Many OEMs are setting up or are planning to set up manufacturing plants across the region due to favorable policies, subsidies and incentives by major SEA countries like Thailand, Indonesia, Singapore and Malaysia.”

Market summary

Thailand’s EV market has grown tremendously this year, making it SEA’s undisputed EV leader. The country grabbed almost 60% of EV sales in SEA in Q3 2022. It aims to achieve 100% domestic sales from BEVs by 2035. Subsidies, excise duty waivers and import tax reductions have put Thailand on the right path in its EV journey.

Indonesia took 25% share in the SEA passenger EV market sales for Q3 2022. Also, during Q3, the country registered its highest EV sales volume till now. The Wuling Air EV model launched during this quarter became an instant hit here and was the best-selling EV model. Recently, many companies have announced plans for setting up EV battery production units in Indonesia, which is in line with the country’s target to build 140 GWh of battery capacity by 2030. Indonesia is a major player in vehicle production in SEA.

Singapore, another growing EV market, captured almost 12% share of the SEA EV sales. It has a target to achieve 100% zero-emission vehicle sales by 2030 and has introduced various incentives, policies and schemes to increase EV adoption. Alongside, it is also trying to develop a well-connected network of 60,000 charging points by the end of this decade.

Malaysia only had a 3% share in the SEA EV market in Q3 2022. Nonetheless, the Malaysian government is supporting the adoption of EVs and has exempted EVs from road, import, excise and sales taxes. Further push to develop charging infrastructure will boost EV sales.

Vietnam announced zero registration fee for EVs in March 2022. Vinfast, the major EV brand, recently discontinued its ICE models to focus on EVs. The future looks promising for the EV market to flourish in Vietnam.

Commenting on the market outlook, Senior Analyst Soumen Mandal said, “The SEA region’s automotive sector is mainly occupied by Japanese OEMs. However, with the shift in focus to EVs, they are facing stiff competition from the Chinese, South Korean and few local players. Affordability remains a major bottleneck for the region’s EV growth. But the scenario is changing with the availability of some cheaper EV options by Wuling, BYD, GWM and SAIC. Unlike developed EV markets such as the US and Europe, low-priced EV options are gaining popularity in emerging markets like Thailand and Indonesia. According to Counterpoint’s Global Passenger Vehicle Forecast, the SEA EV market is expected to grow at a fast pace and by the end of this decade EV sales are expected to cross the 3.5-million mark at a CAGR of 124%.”

*For EVs, we consider only BEVs and PHEVs. This study does not include hybrid EVs and fuel cell vehicles (FCVs).

**Sales refer to wholesale figures, i.e. deliveries from factories by the respective brands/companies.

^#SEA here includes Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

The comprehensive and in-depth ‘Global Passenger Electric Vehicle Sales Tracker, Q1 2018-Q3 2022’ is now available for purchase at report.counterpointresearch.com.

Feel free to reach us at press@counterpointresearch.com for questions regarding our latest research and insights.

Background

Analyst Contacts

Abhilash Gupta

Soumen Mandal

Brady Wang

Peter Richardson

Counterpoint Research

press@counterpointresearch.com

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Thailand Premium Smartphone Market Grew 22% YoY in Q2 2022 Even as Overall Shipments Fell 17% YoY

Thailand’s smartphone shipments fell 17% YoY in Q2 2022 to 4.2 million units.
5G volumes increased 20% YoY with OPPO and Samsung leading the segment.
Premium smartphone shipments (>$400) increased 22% YoY in Q2 2022.
Online channels made up 22% of shipments compared to 19% last year.

Jakarta, London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – August 19, 2022

Thailand’s smartphone shipments fell 17% YoY in Q2 2022 due to continued volatility in the macroeconomic situation, according to Counterpoint’s latest Monthly Thailand Smartphone Channel Share Tracker. The macroeconomic turbulence has impacted Thailand more than its neighbors like Indonesia and Philippines, which is evident from the reduced consumer demand over the last two quarters. The inflation rate rose to 7.66% in June, the highest in 14 years. However, premium smartphone shipments (>$400) managed to buck the trend and grew 22% YoY in Q2 2022.

Source: Counterpoint Monthly Thailand Smartphone Channel Share Tracker, Q2 2022

Note: Figures may not add up to 100% due to rounding

Discussing the factors that affected the shipments in Q2 2022, Senior Analyst Glen Cardoza said, “Thailand has a decent share of consumers who can maintain a good financial standing during this economic slowdown. It is this type of consumer who looks to purchase at least a mid-tier smartphone even in such an economic scenario. With food and related categories being hit the hardest by inflation, consumers who would consider buying a low-tier smartphone are not taking that decision right now. This has resulted in a 23% YoY drop in shipments for smartphones priced less than $250.”

While low-tier smartphones are facing the macroeconomic heat, the higher tiers are balancing the demand in Thailand. Smartphones priced more than $400 have increased their sales substantially in the country over the last two years. In Q2 2022 itself, premium models of brands like Samsung, OPPO, vivo and realme saw an increased demand with every new launch in this category. Apple is always sought after in Thailand, but it has mostly covered the ultra-premium segment. Top Chinese brands have branched out from low- and mid-tiers to the higher price brackets, providing consumers with a much-needed variety in the post-COVID-19 economy. Gaming is another aspect that these brands are promoting better than Apple.

On the operators’ side, 5G smartphones are increasingly finding a place in their packages. Despite a YoY decline in overall shipments in Q2 2022, 5G volumes increased 20% YoY. Samsung and OPPO led this increase with their 5G models.

Operators like Dtac are offering free SIM cards to tourists entering the country as part of unlimited package deals. Dtac has also started trade-ins and e-waste collection at its locations. AIS and others are building a better broadband system with AI-powered smart routers especially targeted at consumers who work and learn online, along with the growing number of gaming aficionados in the country. All these developments are boosting smartphone appeal despite the tumultuous economic situation.

While the Thai Baht is at its weakest, there are factors that are helping the smartphone market to rebound:

Improving tourism
Increasing domestic production
Growing exports
Government initiatives to control inflation

The country’s commerce ministry has warned that price pressures will move into Q3 2022. But it is quite possible that the smartphone market will start seeing a recovery towards the end of Q3 2022 itself. The coming months should see an uptick in pent-up demand. The online share of smartphone shipments saw a YoY rise of around 3% in Q2 2022 to 22%. The coming months will see this share increasing due to focused online marketing by e-commerce players and OEMs. Q4 is likely to be the key quarter in Thailand’s smartphone market revival in 2022.

Feel free to contact us at press@counterpointresearch.com for questions regarding our latest research and insights.

Background

Analyst Contacts:

Glen Cardoza

Follow Counterpoint Research
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Impending Telecom Duopoly to Weigh on Thai Market Competition?

The merger between Thailand’s DTAC and True Corp is on track as the companies have secured approval from their respective boards. This will go on to create the country’s largest mobile operator by subscribers. The merger now awaits regulatory approval.

Currently, there are three large players in the market – AIS, TrueMove and DTAC. The fourth operator – National Telecom (NT) – was formed in January 2021 after the merger of two state-owned telecom operators (CAT and TOT) and does not have any significant market share. One can say that the second round of consolidation has kicked in in the industry. If the DTAC-True merger is cleared by the regulator, it will shrink Thailand’s mobile landscape to a duopoly, with the new merged entity controlling more than 50% of the market.

Thailand’s Telecom Landscape

The merger would send ripples across the telecom ecosystem and networks would be impacted one way or the other. Some of these implications are as under:

Advantages of scale

A major objective of the merger is to scale the business size to drive investments and cost efficiencies, especially when it comes to 5G. True’s high debt level and DTAC’s limited 5G service offering make it challenging for the two to make technology advancements without any immediate returns. The merger will strengthen the position of the new entity with a higher market share, improving its ability to absorb costs and set up a stronger 5G infrastructure with pooled resources. This, in turn, will improve its ability to effectively take on the competition.

On the other hand, AIS has enhanced scale, financial strength and capabilities needed to accelerate growth and support network expansion. It is way ahead of its competitors with more than 44 million subscribers and benefits from economies of scale to achieve return on investments.

Expansion in spectrum portfolio

DTAC has been continuously losing subscribers amid intense competition, lack of 5G services and low network coverage owing to inferior spectrum holding. The merger will lead to True combining its 990MHz of spectrum holding with DTAC’s 270MHz, resulting in enormous spectrum availability of 1,260MHz with the new entity. This is a big value addition as large spectrum holding is the key to rolling out new services and improving capacity with the growing demand.

Operator Spectrum Portfolio Before and After Merger

Technology-driven growth opportunities

The new entity is seeking to raise $100-$200 million in venture capital for the proliferation of the digital ecosystem. The race for the advent of new technologies and services is likely to get a push from this merger. Operator will aim for 5G leadership and capturing enterprise opportunities with AI, cloud technology, connected devices, Industry 4.0 and more.

Wave of consolidation

The scenario can be compared with consolidation in various other markets of APAC. Higher 5G investment requirements and intense competition are the major reasons for several markets of the region to have three or just two major operators. For instance:

Indonesia: Indosat Oordeoo and CK Hutchison completed their merger in January 2022 and now the largest three players control more than 90% market share.
Malaysia: There are three major operators in the country. Axiata and Telenor are in advanced discussions to combine their Malaysian operations, i.e. Celcom and Digi. The merged entity will be the largest mobile operator with over 44% subscriber market share.
India: The Indian telecom market has seen significant consolidation, from a peak of 15 operators in 2012 to just three with a noteworthy presence in the last few years. But the market has a near duopoly as Airtel and Jio are leading the market, whereas Vodafone Idea is bleeding with inadequate investments and a high churn rate among subscribers. It may not come as a big shock if the market shrinks to two major players.

On the contrary, the Philippines had to move away from duopoly to inject much-needed competition. The regulator awarded the operator license to Dito Telecommunity as the country’s third operator since it became necessary to improve service provision and drive down prices. Dito launched mobile services in March 2021. Another entrant, NOW Telecom, secured the license in September 2020 but it is yet to launch commercial services.

Way ahead

Thailand has a highly developed mobile market that has seen strong growth of its 4G subscriber base. While mobile connectivity is upstanding, its quality has the capacity for further enhancement. According to Ookla’s Speedtest Global Index, Thailand ranked 58^th (out of 142 countries) with a median mobile download speed of 33.49Mbps in March 2022. It has better network performance compared to many Southeast Asian countries but is still behind Brunei (71.38Mbps), Singapore (67.99Mbps) and Vietnam (33.90Mbps). It is now navigating to 5G and the market will be driven by increasingly faster speeds at competitive tariffs.

The merger is in its final stages but it may face regulatory roadblocks over the fear of a narrow playing field. The new operator is expected to harness its combined resources to drive network performance. Further rollouts of its network to enhance quality and speed, along with investment in 5G technology, will be the key areas of development. Despite the endorsed benefits, long duration of the merger and any instability in the quality of services during the process can create an adverse impact on consumer sentiments. This, in turn, would be beneficial for AIS, with a likelihood of subscribers upgrading plans from LTE to 5G. Another market implication could be the rise in tariffs and vanilla service offerings amid reduced competition. Taking clues from the Philippines’ trajectory, the regulator needs to make a cautious decision on this merger and ensure the market does not go down the same road.

Key Southeast Asian Countries’ Smartphone Shipments Cross Pre-pandemic Levels in 2021; Xiaomi, realme, Apple Achieve Highest Ever Volumes

Key Southeast Asian countries’ (Indonesia, Thailand, Philippines and Vietnam) smartphone shipments were highest ever in a calendar year in 2021, reaching 96 million units and growing 5% YoY.
Xiaomi, realme and Apple shipped their highest ever volumes in these countries.
Xiaomi had a strong H1 2021 and even though it had a sluggish H2, the brand grew 17% YoY in 2021.
Apple saw its highest ever growth of 68% YoY in 2021 due to the sales of iPhone 11 and iPhone 12 series and the launch of iPhone 13 series.
realme grew 10% YoY in 2021 driven by the increase in shipments in Thailand and Philippines.
5G smartphone share was 18% in 2021, compared to 3% in 2020.

Hong Kong, London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – February 10, 2022

Despite multiple COVID-19 resurgences, offline channel disruptions due to restrictions and sustained component shortages affecting OEMs, key SEA countries (Indonesia, Thailand, Philippines and Vietnam) saw a 5% YoY growth in smartphone shipments in 2021, according to Counterpoint Research’s SEA Monthly Smartphone Channel Share Tracker. At 96 million units, the 2021 shipments were the highest ever for a calendar year and more than the pre-pandemic levels. Q4 2021 volumes, however, remained flat due to supply issues for most OEMs.

Commenting on the region’s smartphone market, Senior Analyst Glen Cardoza said, “Most of the SEA countries saw a COVID-19 resurgence more than once in 2021. Governments and industry players were eager to achieve normalcy in business, but social and economic activities suffered, which did not let the smartphone industry pick up in the second half. However, Samsung was able to resolve shipment issues encountered mid-year to revive its sales and lead in the region. Xiaomi came up strong in Q1 and Q2, which solidified its base in most of the key economies, but it suffered more than others in H2 2021 due to supply constraints. OPPO and vivo continued their launches across price tiers and accelerated their marketing campaigns towards the end of the year. Brands like realme and Infinix brought in affordable models to target users upgrading from entry-level devices.”

Source: Counterpoint Research Southeast Asia Monthly Smartphone Channel Share Tracker, December 2021

On ASPs (Average selling price) and 5G, Cardoza said, “In 2020, more than 55% of the shipments in key SEA countries were for smartphones under the $150 price point. In 2021, this bracket held about 38% share. More consumers are opting for smartphones in the $151-$250 bracket. Besides, 5G was mostly represented by just the top 2-3 brands in 2020. We now see the top five OEMs not only launching 5G models but also actively reducing their ASPs and working with operators to further the adoption of 5G in SEA.”

Commenting on the online-offline channel dynamics, Research Director Tarun Pathak said, “Online share of shipments does not seem to be growing consistently across different countries in the region. Thailand and Philippines saw growth towards the end of H2 2021 while Indonesia and Vietnam still have some infrastructural and mindset miles to cover. To capture a larger mind space through offline channels, most brands are making sure that retail partnerships are well maintained to grow networks across countries. A careful balance between online and offline channel shipments is being worked out by brands. This is being complemented by their tie-ups with operators and retailers.”

Source: Counterpoint Research Southeast Asia Monthly Smartphone Channel Share Tracker, December 2021

Market Summary:

Samsung saw shipment challenges mid-year in 2021 but recuperated to lead in market share. Its manufacturing facilities in Vietnam got back to normalcy towards Q4 and the brand made sure that marketing campaigns were in focus for all its new launches. A series was key to Samsung’s volumes in the year.
Chinese brands grew more in 2021 and captured 71% of the market, led mostly by OPPO, Xiaomi, vivo, realme and Infinix.
OPPO’s strong hold over the SEA continued in 2021 with consistent demand for its Reno series and A series smartphones. Consumers responded to its strong promotions and offers.
vivo’s Y series continued to perform well through 2021. The brand’s strong offline network strategy has helped over time. Marketing campaigns and endorsements have helped in increasing its exposure in these markets.
Infinix, which was one of the highest gainers for the year, shows future promise but its volumes are comparatively still low.
Even though there was a brief slowdown in Apple shipments in H2 2021, the brand sold more of the 11 and 12 series iPhones at the start of the year and towards the end as well. Thailand and Vietnam came up as the drivers for this premium brand.
As opposed to 8% 5G smartphone share in Q4 2020, 25% 5G share was seen in Q4 2021. This is bound to grow much higher in 2022.
MediaTek, which led in chipsets in the region in 2020, extended this lead in 2021 by taking share from Qualcomm and other brands. Brands like Unisoc hold promise in reducing BoM cost for low-tier smartphones.
Shopee continued to lead and increase its share in online smartphone shipments in the region in 2021. While Lazada tried to recapture its sales, other e-commerce platforms like JD (Indonesia and Thailand), Tokopedia (Indonesia) and Bukalapak (Indonesia) slowly improved their festive sales, especially in Q4 2021.
The key Southeast Asian countries showed resilience in 2021 despite multiple challenges. 2022 will see these countries increase their economic activities, which should, in turn, improve job situation, tourism and subsequently consumer buying sentiment. We are looking at a decent 5% YoY growth in the region’s smartphone shipments in 2022. 5G advancement, operator competition and consumer smartphone upgrades should make this possible.

Note: OPPO includes OnePlus shipments in this publication, Xiaomi includes POCO

Feel free to contact us at press@counterpointresearch.com for questions regarding our latest research and insights.

Background:

Analyst Contacts:

Glen Cardoza

Tarun Pathak

Follow Counterpoint Research
press(at)counterpointresearch.com

Thailand Telecom: Key Implications of TRUE-Dtac Merger

AIS, TRUE and Dtac are Thailand’s three biggest telecom operators. With the merger of TRUE and Dtac, the new entity will be the No. 1 operator in terms of subscribers and revenue. While it will be ahead of AIS, the merged entity’s stance on 5G will decide its long-term growth trajectory.

A major objective for the merged behemoth will be to expand into new areas like AI, IoT and cloud computing. For this, it will have to focus on 5G expansion. As AIS is already the first mover in 5G, the merged entity is most likely to pool resources to set up a stronger 5G infrastructure for enterprises and consumers. But this will take time. Two major challenges for TRUE and Dtac here are:

Dtac is yet to receive its 5G licence.
TRUE’s high current debt.

AIS is way ahead of both its competitors on these aspects and it is quite likely that the 5G subscriber base will widen in favour of AIS in the next one year.

Impact on Thailand’s telecom sector

While the two telecom companies are set to merge with equal stakes, they will be running their operations independently till around the second quarter next year. These operations, however, will be run keeping the merger in mind. As both TRUE and Dtac have similar bases, this effort is expected to be comparatively easy. While a price war is unlikely, operators are most likely to step up their efforts to tap into any unsubscribed remainders in the country, especially in Tier 3 and Tier 4 geographies. Based on how the completion of the merger takes place and upcoming efforts from major competitors like AIS, the overall effect on the Thai telecom sector will most likely be felt in H2 2022.

The race for digital transformation, 5G supremacy and Industry 4.0 is likely to get a boost from this merger. Like Globe in the Philippines, which has asserted its dominance on 5G speed and ventured beyond the national borders, it is possible that the big three operators in Thailand will look to at least start with regional partners. It is more likely for AIS to do this faster than TRUE, Dtac or the merged entity. Current transitions in Thai telecom will last longer.

Government’s stance

The Thailand government’s policies on competition are strict. The merger’s potential of crossing the 50% market share mark could spell a complication for it. Both entities might relook at valuations and other specifics or consider making provisions to deal with it differently. Either way, the transition is not likely to go very smoothly. Time will be of the essence and any delays might translate to a shift in subscriber loyalties.

Impact on consumers

Consumers in Thailand are among the most tech-savvy in the region. They are in a transition towards better networks, clearer signals, 5G smartphones and 5G packages. This is especially true for those residing in the metros and Tier 1 cities. Any inconsistencies in these upcoming trends might not go in favour of Dtac and TRUE. But AIS stands to gain here. Therefore, it is possible to see a certain proportion of subscribers shifting from TRUE and Dtac to AIS. Within those switching operators, an uptick in 5G subscriptions is possible as a fallout.

Telecom, E-commerce Central to China’s Renewed Focus on Southeast Asia

Southeast Asia holds great potential for growth in the technology and e-commerce sectors. It has a comparatively young and tech-savvy demographic which is experiencing a digital transformation jumpstarted by the COVID-19 pandemic. Even 5G commercialization is being pushed in most of the region’s key countries.

Overall, the US, EU and Japan remain the key investors in Southeast Asia. But this might change with China’s renewed focus on the region. The country has been investing in Southeast Asia across sectors for more than a decade now, with infrastructure projects traditionally bagging more funds. However, China’s influence in the region has increased after the start of its trade tussle with the US. Critical sectors like electricity and telecommunications are now being backed by Chinese investors.

The region’s smartphone landscape went through some volatility after COVID-19. This is when Chinese smartphone OEMs started pulling share from Samsung. Their smartphone share in Southeast Asia has made up a majority for more than a year now. It has increased substantially over the last few quarters. In Q2 2021, main Chinese OEMs made up 75% of the total smartphone shipments.

E-commerce initiatives by Chinese players

Chinese investors have been increasing their stake in the region’s e-commerce companies for some time now. Since 2017, e-commerce has been the avenue of interest for Chinese investment due to its growth potential and near-absence of any geopolitical challenge for China in the region. JD.com, Alibaba and Tencent were among the first Chinese investors to pump capital into e-commerce in this region.

5G initiatives by Chinese players

Some countries in the region depend on Chinese technology and know-how. Indonesia has been dependent on Huawei’s 5G technology for more than a year now. The Philippines depends on Chinese telecom infrastructure know-how. In Thailand, Huawei has an active investment in 5G infrastructure. ZTE is another Chinese player with an active role in digital connectivity in the region. These three countries will look to reduce their overall dependence on Chinese tech in the coming months. Currently, however, their goals are focused on 5G development from an economic standpoint. Some countries like Malaysia and Vietnam have given Chinese 5G assistance the cold shoulder.

5G represents a leap in technological growth and overall data sharing. This is an important factor for Southeast Asian countries to consider while partnering with China. Also, such decisions have the potential to become national security issues.

Many major telecom operators in Southeast Asia are lagging in 5G as they still need to recuperate from heavy 4G investments. This is also an area where Chinese capital plays a big part. In contrast, major Chinese smartphone OEMs are ready with 5G devices.

Manufacturing

Since some of the region’s countries are global manufacturing hubs (especially Vietnam and Indonesia), Chinese players will look to diversify their own production facilities. As production capacities shift out of China, these OEMs will aim at buying a stake in the region from a production and assembly point of view. The absence of geopolitical issues and growth potential of the region will serve as motivations for these players.

The Chinese influence is currently strong in the region but so are the investments from US behemoths like Microsoft and Google. Southeast Asia will continue to see an influx of funding in the coming years as this region is set to witness an improved economic climate, enhanced industrial system and increased maturity of consumers with respect to tech.

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