Smartphone sales slowing

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Smartphone sales slowing

May Kunmakara and Daniel de Carteret

After years of ever-brisker sales, the smartphone market may be plateauing.

Cambodians spent more than $300 million on smartphones last year, a 38 per cent increase from 2012’s figure of about $220 million, according to data from Singapore-based research firm GfK.

Some 907,000 smartphones were sold in the Kingdom in 2013 – 42 per cent more than the year before. However, the new figures also reveal that the boom may be fading, with sales growth slowing to 10 per cent in the first quarter of this year compared to the same period in 2013.

Despite the slowdown, GfK said that if sales elsewhere in the region are anything to go by, there is still room in Cambodia for the pace to pick up again.

“The trend will increase in smartphone demand, and vice versa for feature phones,” said Gerard Tan, account director for Digital World at GfK Asia.

According to GfK, which collects data from phone retailers throughout Southeast Asia, smartphones accounted for 55 per cent of all handsets sold in the region in the first three months of the year.

“More than half the market today is contributed by smartphones, and the trend will be sustained as the switch-over [from feature phones] in emerging markets takes precedence,” Tan said.

But Gwihan Lee, managing director of Samsung’s Cambodian and Lao branches, said yesterday that half of the Kingdom’s mobile phone owners were already using smartphones.

Furthermore, due to the cost of upgrading from a feature phone to smartphone, he said he believed that the market was at saturation point, leaving little room for further growth in the short term.

“Some customers can not afford to buy a smartphone,” Lee said via email. “Now, second hand smartphone demand has increased a lot, especially in provincial areas.”

Lee, whose company is the top smartphone retailer in Cambodia, added that sales campaigns in the future would target those seeking to replace their existing smartphones, rather than make the switch from feature phones.

Hor Hab, deputy managing director of GGear, an authorised dealer for LG Electronics, said local smartphone sales were slowing, but pointed to a different cause.

“Starting since early this year, the government has charged 10 per cent more in special tax, which is not charged by any other country in Asia,” Hab said.

“So when we add 10 per cent more in VAT, it makes it difficult to compete with illegal smuggling and neighbouring counties, and that’s why you see most of our people visit our neighbours to buy a smartphone there, as it is a bit cheaper than us.”

Hab estimated that in Cambodia’s smartphone market, LG, Sony and Huawei each have a share of about 5 per cent. Nokia has close to 8 per cent, Apple has increased its to about 30 per cent and Samsung leads the pack with about half of the market, Hab said.

Jason Liu, director of Huawei’s Cambodian consumer business, could not be reached yesterday, but he told the Post in April that he was confident in the local market’s prospects.

“I believe that in the next five years, 80 or 90 per cent of feature phone users will become smartphone users.” Liu said.

http://www.phnompenhpost.com/business/smartphone-sales-slowing