Indonesia's smartphone market expected to grow 8% in 2022: IDC

• Smartphone market expected to reach 44 mil units in 2022
• Recorded strong growth of 47% compared to previous year

Indonesia's smartphone market is expected to reach 44 million units in 2022, growing by 8% year-over-year (YoY) as supplies improve.

This comes after a strong rebound in 2021 with 40.9 million smartphones resulting in an 11% growth, according to the IDC Worldwide Quarterly Mobile Phone Tracker. 

The report also highlights that the first half of 2021 recorded strong growth of 47% compared to 1H20 and 20% against first half of 2019, although the market slowed in second half of 2021, IDC said in a statement.

The year 2021 started with a bang as YoY growth reached double digits for the first half of the year. This was mainly due to the decreasing of Covid-19 cases and the preparation for Ramadhan, the survey indicated.

However, it quickly came to a halt as the Covid-19 Delta variant wave came, forcing the government to apply restrictions that led to a retail shutdown in third quarter of 2021.

In the midst of that, supply continued to tighten, the report said.

Shipments improved 10% (quarter-on-quarter/QoQ) in 4Q21 as the cases were contained, restrictions were lifted, and vendors released new products in tandem with the year-end double date promotions throughout the quarter. However, shipments were still lower than last year by 13%, it added.

As we move into 2022, IDC expects smartphone supplies to improve gradually. 

The smartphone vendors are expected to start stocking up before the Ramadan festive period, and to prepare for changes in the Tingkat Komponen Dalam Negeri (TKDN) local content regulation, as well as tax increases in April 2022, it added.

According to Vanessa Aurelia, associate market analyst from IDC Indonesia,  vendors are largely ready for the increase in the local content requirement, but there are uncertainties regarding their higher-end portfolios which may be subject to a stricter set of rules. 

“Channel players also may stock up before the tax rate is increased from the current 10% to 11%.

“Additionally, the recent merger between Indosat Ooredoo and Hutchison 3 is expected to further accelerate the growth of 4G and 5G network in Indonesia", she added. 

The report states that OPPO and Vivo managed to defend the number one and two spots in fourth quarter of 2021, continuing their streak from the previous quarter as both brands maintained their supply. 

Both brands also led the low-end and mid-range segments, which accounted for three-fourths of the Indonesian market in 4Q21, it said. 

Meanwhile, Samsung managed to recover from third quarter of 2021, supported by its popular Galaxy A models, specifically the Galaxy A03 series and Galaxy A12, the report stated. 

Top 5 Smartphone Company Highlights (2021):

• OPPO emerged as the top player in 2021 after being displaced by vivo in the previous year. It recorded a 3% YoY growth with a greater focus on the low-end segment (US$ 100 (RM423) < US$ 200 (RM846)) in 2021;
• OPPO became the leader of the low-end segment with a 28% market share, compared to 24% a year ago, however it had a lower share of 5G smartphones in its portfolio compared to the other top players in 2021, with most of its US$ 400+ (RM1,690) smartphones being 5G enabled, but lesser in the lower price bands;

[RM1 = US$0.236]

• Xiaomi achieved the highest growth in 2021 amongst the top 5 players, despite a steep drop in shipment in second half of 2021 due to supply constraints;
• Vivo took third place in 2021 with its Y12s and Y20 as the biggest drivers. While vivo continued to be strong in the low-end (US$ 100 < US$ 200) segment, it declined in the higher price segments;
• Samsung took fourth place in 2021 with YoY growth in all quarters of 2021 except in the third quarter; and
• Realme managed to keep the fifth spot in 2021. The Realme C11 (2021) was the top-selling model.