Thailand's smartphone market is expected to return to growth in 2024 from an anticipated decline this year, due to replacement demand from 2021, new artificial intelligence (AI) features on smartphones, and a greater number of affordable 5G devices available in the market.
The AI on the devices will be the game changer in the smartphone market in 2024, said global tech market analyst firm Canalys.
"Thailand's smartphone market is anticipated to make a comeback in the first half of next year," Canalys analyst Sheng Win Chow told the Bangkok Post.
With smartphone shipments spiking in 2021, reaching 20.6million units, the company expects that many of those consumers will now be ready to purchase a new device next year, Mr Chow added.
The planned introduction of AI features on Samsung's Galaxy S Series model and the availability of more affordable 5G smartphones priced at US$170 or lower also provided strong selling points to stimulate the demand for new devices.
Thailand leads the Asean region in 5G adoption, boasting over 85% network coverage and significantly lower prices for 5G postpaid and prepaid tariff plans. The affordable 5G prepaid plans are especially important to widen the 5G user base. These factors make Thailand an appealing market for mobile phone vendors to launch a greater variety of 5G smartphone options in the market.
Moreover, Thailand has a sizeable population of various demographics that allows them to fully invest to target multiple price-points and product segments, from entry level to flagship devices. All these can be compared to other markets like Singapore, which is small in population and skewed to higher-end phones, or markets like Indonesia and the Philippines which are large in population but heavily skewed to the low-end.
In addition, the Thai retail landscape is also much more sophisticated than other Asean nations. Brands recognise the need to create unique and engaging shopper experiences. Bangkok was chosen as a city for Samsung's "Join the Flip" concept store, and Realme recently piloted its first-ever Realme experience store 3.0.
Mr Chow added that the level of investment in above-the-line marketing like billboards in Thailand is also strong.
He said the overall outlook for the Thai smartphone market in 2023 is predicted to fall by 6% from 17 million units in 2022, due to the challenging economic conditions.
Regarding the mobile phone device competition in Thailand, the Transsion and Realme brands have high growth prospects in the short-term by capitalising on competitors shifting away from the entry-level and low-price segments. Their product portfolio of affordable models is well suited to local distributors or wholesalers with the capacity to drive large volumes quickly, he added.
Meanwhile, Samsung and Oppo's product strategy is more focused on growing in higher price-segments and premium product offerings. Both are lessening their reliance on distributors and building more premium channels like brand stores and through greater sales partnerships with telecom operators.
Xiaomi and Vivo also have ambitions to grow in the premium segment, but unlike Oppo and Samsung, they are still heavily focused on defending shares against Transsion and Realme at the low-end segment.
Xiaomi focused efforts in the third quarter to defend its market share from Transsion in the under-$199 segment by lowering the price of its Redmi series. It has also consolidated its product line-up to get economies of scale in production for more competitive pricing.
Honor also has high growth potential after its split from Huawei. Its product and channel strategy is more similar to those of Samsung and Oppo.
Mr Chow said on-device AI is potentially a game changer in the future as it opens opportunities for smartphone brands to differentiate their products beyond hardware specification features.
Samsung is the first to announce that it will have AI on the Galaxy S Series model, and one must wait and see how vendors will leverage their position as device manufacturers to gain an edge in this space.
Foldable mobile phones are also a space to watch. Oppo and Samsung have made a bet that foldables will be the main form factor for flagship devices in coming years.
The new features and compelling use-cases of the foldable devices will move this shift in demand. It will be interesting to see why Apple has not entered the foldables space yet and what they see differently from their competitors, Mr Chow added.