Smartphones to boom in Southeast Asia, says Canalys

About 106 million mobile phones are expected to ship in Southeast Asia in 2011, up 19% from the 90 million units shipped last year, according to Canalys. Driveny primarily by smartphone growth, the number will increase to 163 million by 2015, said the market research firm.

Smartphone shipments will achieve a CAGR of 39% over the next four years, with particularly strong momentum anticipated in emerging markets such as Indonesia, the Philippines and Vietnam, Canalys said.

Canalys pointed to several key factors that will fuel the region's smartphone market expansion, including a positive economic outlook, local operators' eagerness to grow average revenue per user (ARPU) from increased data subscriptions, strong social media usage among end-users, robust demand for mobility products and competitively priced phones.

"Southeast Asia has a diverse but incredibly dynamic smartphone market right now," said Rachel Lashford, managing director of Canalys, Mobile & Asia Pacific."Consumers and vendors are in a win-win situation, thanks to a powerful combination of mobile-savvy end-users and a favorable economic landscape."

Both within the region and globally, Singapore particularly stands out as having one of the most advanced markets in terms of smartphone penetration, Canalys said. In 2010, smartphones accounted for 61% of all mobile phones shipped in the country, significantly higher than the global average of 23%. Phones priced at the premium end of the market found favor with local consumers, with more than 50% of smartphone sales priced over US$550. Canalys forecasts that this trend will continue through 2011, with high-end devices accounting for the majority of the 3.1 million smartphones expected to ship in Singapore.

"The three major operators in Singapore have successfully enticed consumers through their wide product portfolios, competitively priced bundled data contract plans, attractive subsidies and strong marketing campaigns to promote the latest smartphones," said Canalys principal analyst Daryl Chiam. "SingTel, for example, has worked closely with HTC for the exclusive launch of the ChaCha smartphone last week."

In contrast to Singapore, Canalys anticipates competitively priced mid- and lower-tier products to generate growth in other parts of Southeast Asia.

Meanwhile, on the vendor front, Nokia will continue to face pressure as a result of its ongoing strategy and platform transitions, according to Canalys. With its wide distribution network capable of pushing significant volumes, Canalys believes that the vendor is still well-placed and should not be underestimated.

"Once Nokia is through this transitional period and has delivered a Windows Phone-based product portfolio across several price points, it will re-establish itself as a formidable force in the smartphone market," Chiam noted. "Until then, other manufacturers will be looking to fill the gap."