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Indonesia Smartphone Market Ends the Year on a High Note in Q4 2015

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Note -- this news article is more than a year old.

According to International Data Corporation's (IDC) Quarterly Mobile Phone Tracker, 8.3 million smartphones were shipped in Indonesia in 2015Q4 up 14.4% from 7.3 million units for the same period last year. However, the sequential increase in 2015Q4 was much higher than the same period last year as vendors shipped in higher volumes of smartphones before their import licenses expired in the end of 2015 or early 2016. The full year shipments grew 17.1% to 29.3 million units in 2015.

Most of the top vendors reported a sequential and year-over-year growth. Asus rose to the No. 1 position in the Indonesia smartphone market gaining 22% of the market share. According to Reza Haryo, Senior Market Analyst, Mobile Phones "Asus shipped significantly higher number of smartphones in 2015Q4 as some models launched in late 2015Q3 had full quarter shipment in 2015Q4 and also launched new models- Zenfone Go and Zenfone Selfie, during the same time. In addition, Asus took pre-emptive steps to stock the Zenfones inventory in Indonesia before Asus' import license expired in late Q4."

The China-based vendors continued to expand their share in the Indonesian market, with their share rising to 21% in 2015Q4 from 15% during the same period a year ago, mostly at the expense of the local vendors. Amongst the China-based vendors, Lenovo in particular has established a strong foothold. "Lenovo too started its local manufacturing in Indonesia and its A series phones priced at US$100 were quite successful in the market," Reza added.

For the China-based vendors, two-thirds of their smartphones were 4G-enabled, up from a mere 6% a year ago. The home-grown vendors on the other hand have only just started making a transition towards 4G smartphones with Smartfren leading the pack with its low-priced 4G Andromax smartphones. While Advan, Evercoss and Axioo just launched their 4G smartphones in 2015Q4, and Polytron and Himax have been present in this segment for a few quarters now, the volumes remain very small. Indonesian operators have also started promoting 4G services more aggressively and have partnered with a few handset vendors to offer device bundling on their 4G data plans.

Local vendors are getting squeezed as vendors such as Lenovo and Samsung are getting more aggressive in the sub-US$100 price band segment. "Thus, in order to compete, local vendors are compelled to offer higher value proposition for their devices. Polytron, for example, has tried to differentiate by developing its own customized Android version which will be called OS FIRA. Some others have started offering 4G phones at price points much lower than those of China-based or global vendors," adds Reza.

The Ministry of Communication and Information Technology had announced the new local content regulation in July 2015, although terms remained uncertain for a long time.

"Despite the uncertainty, vendors have been quick to take pre-emptive steps to adhere to the regulation so they don't lose out in biggest smartphone market in South East Asia," says Kiranjeet Kaur, Research Manager Asia/Pacific Mobile Phones. On top of that the mobile phone import license for many vendors was set to expire in end-December 2015, and in 2016Q1 for the rest of them. She adds, "This is likely to impact smartphone shipments in the short term. But the new initiatives are less likely to dampen the growth of 4G smartphones in the country in the long term and IDC expects 4G smartphones to grow at a double digit growth rate for the next few years".

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Tags: Indonesia