After enduring eight consecutive quarters of decline, Indonesia’s smartphone market staged a remarkable rebound, surging by 8.8 percent year-over-year (YoY) in the third quarter of 2023, reaching a total of 8.9 million units, as latest data from the International Data Corporation’s Worldwide Quarterly Mobile Phone Tracker said.
The resurgence, accompanied by a marginal quarter-over-quarter (QoQ) decline of 0.9 percent, sparked heightened competition among vendors across various price segments in Indonesia. The market landscape witnessed aggressive maneuvers facilitated by expansive retail strategies and strategic price reductions.
Segmental Growth
The growth trajectory encompassed all price segments, notably propelled by a surge in higher-priced smartphones exceeding US$600, which more than doubled in size compared to the previous year. This spike was primarily attributed to the launch of Samsung’s new foldable models and the robust shipments of Apple’s iPhone 13 and iPhone 14 series.
The mid-range segment, spanning from US$200 to US$600, also experienced substantial growth, escalating by 16.8 percent YoY. Key players such as Samsung, Apple, and OPPO strengthened their offerings in this segment, contributing significantly to its expansion in Indonesia.
Even the lower-end segment, below US$200, witnessed a resurgence, growing by 2.7 percent YoY after enduring a few quarters of decline. Intense competition among Transsion, vivo, Xiaomi, and realme in this segment spurred growth, revitalizing this market tier.
Average Selling Price and Competitive Landscape
Driven by vendors’ emphasis on the more lucrative higher-priced segments, the Average Selling Price (ASP) continued its upward trajectory, marking its eighth consecutive quarter of growth. In 3Q23, the ASP soared by 9 percent YoY, reaching US$205, signaling a market trend favoring higher-priced models in Indonesia.
Vendor Highlights
OPPO reclaimed the top position in Indonesia after a period of displacement, propelled by a series of new model releases that fueled growth across multiple price segments. Their strategic expansion bolstered their market presence significantly.
Transsion surged to the third position, dominating the <US$200 segment with its sub-brands Infinix and iTel. Their focused approach in this price bracket garnered substantial market share and propelled their ascent in the rankings.
Xiaomi showcased a remarkable resurgence, registering significant YoY growth after grappling with inventory challenges in previous periods. Their strategic maneuvers and renewed focus contributed to this noteworthy rebound.
After declining last quarter, 5G smartphone shipments in Indonesia bounced back and grew 54 percent YoY, reaching an all-time high in share as it contributed 19.2 percent of total smartphones in Indonesia in 3Q23. The market was still led by Samsung with its wide 5G portfolio, but with OPPO closing in with its many 5G releases in 3Q23.
“We are starting to see a path to recovery with this rebound in 3Q23. However, with reports of slow consumption, vendors are expected to continue to exercise diligence in strategizing their moves to prevent excessive inventory in their channels,” says Vanessa Aurelia, Associate Market Analyst at IDC Indonesia.
Full year 2023 smartphone shipments in Indonesia are expected to stay lower than, or at best, flat when compared to 2022, IDC said.
The resounding revival of Indonesia’s smartphone market in 3Q23 demonstrates a shift in consumer preferences across diverse price segments, underscoring the importance of strategic portfolio expansions and competitive pricing strategies among leading vendors in sustaining market growth and dominance.