Thailand: Smartphone sales down 20% in first quarter

Thailand’s smartphone sales declined by 20% year-on-year in the first quarter, compared to a global fall of 14.6% in the same period, mainly due to a sharp drop in the low-end smartphone segment, according to analysis from market research firm IDC Thailand.

However, Apirat Ratanavichit, a market analyst at IDC Thailand, the local unit of global research firm IDC, said there was growth in the country’s upper market segment during the first quarter, due to strong sales of new flagship smartphone models from Samsung and Apple.

Smartphone shipments worldwide declined by 14.6% year-on-year to 268 million units in the first quarter of 2023, according to preliminary data from the IDC Worldwide Quarterly Mobile Phone Tracker released in April. This marks the seventh consecutive quarter of decline as the market continues to struggle with lukewarm demand, inflation, and macro uncertainties.

According to the IDC Worldwide Quarterly Mobile Phone Tracker, released in March, IDC expects Thailand’s overall smartphone market in 2023 in term of units and value to be flat, due to ongoing inflationary concerns, rising interest rates and a lacklustre growth forecast for the Thai economy.

Overall consumer spending power is unlikely to rebound in the short term in 2023, largely affecting the lower-end segment which comprises the bulk of the smartphone market. For the premium segment, IDC expects sustained growth as consumers are attracted to vendor offerings with a superior user experience, better specifications and innovations.

The purchasing power remains in the upper smartphone segment with a price range of US$800 per unit, said Mr Apirat. Foldable smartphones are also a factor stimulating growth at the high-end, as well as greater choice available in the market from brands such as Samsung and Oppo.

Thailand’s smartphone market declined by 21% in 2022, with 16.6 million shipments marking the lowest number of units sold in a year since 2014. Shipments fell 23% year-on-year to 4.2 million units in the fourth quarter of 2022.

The lack of government stimulus campaigns in 2022, which increased smartphone adoption in the previous year, coupled with economic and inflationary pressures, contributed to the steep decline in shipments, particularly in the entry-level smartphone segment.

In 2022, there was 17% year-on-year growth in the premium segment. Apple was the dominant player in this segment with a 79% share, down slightly from 82% in 2021 as Samsung increased its share in the segment with the Galaxy S and Galaxy Fold series models.

The share of 5G smartphones increased to 35% in 2022, compared to 24% in 2021. However, the volume of 4G to 5G conversion was not comparable to 3G to 4G conversion due to a lack of compelling use cases for consumers and affordability concerns. In 2022, 5.7 million 5G smartphones were shipped, increasing by 14% from 2021.

“We expect 5G smartphones to account for half of the total market this year as more affordable entry price models are available,” Mr Apirat said.

In terms of full-year market share in 2022 in Thailand, the top five smartphone brands were Samsung, Oppo, Apple, Vivo and Xiaomi, with shares of 24%, 17.9%, 14.5%. 13.6% and 12.6%, respectively, according to IDC.

In the fourth quarter of last year, Samsung maintained its lead in the market for the sixth quarter in a row, but its share declined by 11% quarter-on-quarter and 20% year-on-year. Samsung had a strong performance in the premium segment with its Galaxy S/Foldable smartphones.

Apple rose to second place with an increase of 30% quarter-on-quarter but a year-on-year decline of 7%. The new iPhone 14 range was launched in Thailand in September 2022, as opposed to fourth-quarter launches in previous years, which led to much stronger third-quarter shipments in 2022.

Oppo dropped to third place but saw sales increase by 18% quarter-on-quarter with a slight fall of 0.6% year-on-year.

Vivo rose to fourth place and saw a 36% quarter-on-quarter growth and an 18% year-on-year decline. Xiaomi dropped to fifth place with a 3% quarter-on-quarter decline and a 50% year-on-year fall.