Southeast Asia’s smartphone market hits nine-year low in Q2

Global economic slowdown hits export-oriented Vietnam hard

Southeast Asia’s smartphone shipments fell 15% year on year to 20.9 million units in the second quarter to reach its lowest volume since 2014 amid a gloomy macroeconomic environment. 

Market data published by Canalys showed last quarter’s slump was the ninth consecutive quarters of yearly decline or since a 2% uptick was recorded in the fourth quarter of 2021. The continued decline was attributed to unfavorable macroeconomic conditions, resulting in increased stock of old models in factories.

Second quarter shipments in Internet-savvy nations Indonesia and the Philippines fell by 13% and 18%, respectively, while export-oriented Vietnam recorded a sharp 24% plunge due to the global economic slowdown. 

Canalys said phone makers also had to subsidize their channel partners who were forced to clear stocks at steep discounts to make room for new shipments. 

“In Q2 2023, increased 5G adoption in operator-centric markets like Thailand and Malaysia drove some momentum, as telco operators seek cost-effective 5G devices for promotions,” said Le Xuan Chiew, analyst at the research firm. “Affordable 5G remains a key driver for maintaining long-term share in telco-driven markets.”

Korea’s Samsung remained Southeast Asia’s most popular brand with 4.2 million units shipped to account for 20% of all the shipments in the second quarter, followed by Chinese brand OPPO with a 16% market share. 

All phone brands posted an annual drop last quarter except for Chinese phone maker Transsion, whose shipments jumped 31% to 2.9 million units that propped it to enter the region’s top five phone brands for the first time ever with a 14% market share.

Canalys traced the surge in performance to “aggressive low-end offerings” and expansion to Malaysia, Thailand and Indonesia while solidifying its footprint in the Philippines.

It said smartphone shipments are expected to gain momentum in the second half on the back of incentives and new high-end launches. Southeast Asia’s robust macro fundamentals, with disposable income rising and the middle-class and young population expanding, will continue to support the long-term outlook for the sector, according to the firm.