Malaysia's smartphone growth slowed in first quarter: IDC

• A projected decline of 5% for Malaysia smartphone market in 2022 
• Brands are not optimistic of high 5G adoption rate this year

Malaysia’s smartphone shipments declined 21.7% in the first quarter of 2022 compared to the same period, according to data from IDC's Worldwide Quarterly Mobile Phone Tracker. 

In a statement, the research firm said the drop in smartphone shipments was due to supply challenges for low-end 4G models, especially from the Chinese vendors, impacting volumes and allocations. 

Also, the cost of living climbed in Malaysia since the start of 2022, hitting essential goods and other baskets, therefore lowering consumers’ budget for smartphones, it noted.

IDC market analysts Ahmed M Ahmed said for the first time in two years, Malaysians were able to celebrate Ramadan and Raya free of Covid-19 restrictions with locals spending more on clothing for open house visits, domestic travels, and other seasonal leisure activities. 

“This has promoted those in need of a smartphone to wait for seasonal offers and a better supply of affordable models in the second half of 2022,” he said. 

IDC projects a decline of 5% for the Malaysia smartphone market in 2022. 

It said supply constraints for Android’s 4G low-end models will make it a challenge for most vendors to meet the demand. 

On the other hand, the slowing down in demand will lower shipments of higher-priced models, it added.

While the increase in minimum wage from May 1 was meant to ease conditions for low-income consumers, businesses are increasing prices to counter the rising costs of materials and logistics as well as higher wages, IDC nonted. 

IDC said retail is growing back its share as more consumers are buying less through the eTail and telco channels, compared to 2021 which had a higher base due to subsidies and online promotions.

Additionally, 5G in Malaysia hit another roadblock in mid-May as the top providers are still negotiating with the Digital Nasional Berhad (DNB), the company said.

“As things stand, brands are not optimistic that 2022 will see a high adoption rate for 5G plans by consumers.

“Confidence in the coverage quality and the rollout speed will be a major hurdle, along with data plan costs, but we expect the smartphone vendors to continue to roll out 5G smartphones in the market,” he said.