Low 5G penetration impacts 5G smartphone shipments in South-East Asia in June quarter, report

Smartphone shipments in South-East Asia dropped 7% sequentially to 24.5 million in three months ending June, shows a Canalys report, published on Monday. Shipments of 5G smartphones also declined sequentially and now account for 18% of the overall smartphone shipments during the quarter, the report added. 

Canalys attributes the overall decline in smartphone shipments to the weakening of consumer demand on account of inflation and the failure of brands to keep the prices of devices in check. The decline in 5G shipments was due to the low penetration of 5G in the region. 

“5G deployment in developing Southeast Asian markets has been abysmal,” said Chiew Le Xuan, research analyst at Canalys. 

As a result, the “hype for 5G has dwindled, and demand has shifted to more practical aspects of smartphones such as battery life, storage, processor speed, and camera quality,” he added. 

According to Xuan, practical uses of 5G are yet to be seen and are not required for low-mid devices as 4G speeds are more than capable of handling everyday requirements. 

Shipments in Thailand fell 14% quarter-on-quarter (QoQ) due to forex depreciation against the USD, while in Vietnam it declined by 20% due to growing consumer uncertainty.

The region saw some growth in Malaysia, Indonesia, and the Philippines where shipments grew QoQ at 6%, 2%, and 4% respectively. 

Indonesia continues to be the largest market in South East Asia, accounting for 9.1-million-unit shipments or 37% of the market share. Canalys attributed the modest growth to festive bonus payouts to workers in the country on the occasion of Ramadan.

The Philippines, with 4.4-million-unit shipments, was the second largest market. It grew on account of the increase in vendor activity in the June quarter.  

In terms of brand market share, Samsung was the largest smartphone seller in the region with 23% of the market share, even though its shipments declined 19% QoQ due to lower demand for mid-range Galaxy A series smartphones. 

The rest of the market was dominated by Chinese companies- Oppo (18%), Xiaomi (16%), Vivo (12%), and Realme (11%). 

According to other market reports, 5G has been the key driver for smartphone shipments in India. CMR reported early this month a 163% YoY and 7% QoQ increase in 5G shipments in the June quarter. 5G smartphones accounted for 33% of all smartphone shipments. It is expected to grow further due to the completion of 5G auctions last month and the expected roll-out of 5G services later this month.