M'sia smartphone market grew in 2021, remains flat in 2022: IDC

• Closed 2021 with over 12 million units 
• Subsidy programs for B40 fueled smartphone growth 

Malaysia's smartphone market closed 2021 with over 12 million units according to the latest International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker. 

In a statement, the market research firm said aggressive shipments in first half of 2021 fuelled this growth despite a decline for both supply and demand in the second half of the year.

According to Ahmed M Ahmed, market analyst for Malaysia Mobile Devices, a government subsidy program plus relatively uninterrupted logistics compared to neighboring Asean markets drove Malaysia's market in the first half of 2021.

“A subsidy program was rolled out to provide the bottom 40 economic group with affordable access to smartphones through telco operators.

“Qualified individuals were able to receive a smartphone bundled with a data plan to stay connected during lockdown periods.

"Top vendors used this opportunity to partner with operators and expand through this channel. This includes vendors that are not considered a strong player in the telco space, like Xiaomi,” he said.

Ahmed said both Samsung and Xiaomi cemented their dominance in Malaysia's market, with combined shipments for both brands accounting for nearly 50% of all smartphones in 2021. 

"Honor's reentry in late 2021 received a muted response, however, the gap left by Huawei in the high-end Android market can be shaken by a familiar brand," he noted.

Meanwhile, IDC is forecasting a flat growth for smartphones in 2022. In a step toward post-pandemic recovery, the government is encouraging consumers to increase spending on other products and sectors, it said.

A new tax rebate is aimed to entice consumers to buy new energy-efficient home appliances, it added.

Additionally, another tax rebate is focused to promote local tourism during 2022 and we will see consumer demand for smartphones drop as spending on entertainment and elsewhere take priority, IDC said.

Despite over 28% of smartphones shipped in 2021 being 5G capable, 5G is still not offered by the major players in the country, the survey indicated.

IDC also said that Malaysia is lagging other countries in Southeast Asia in this aspect.

However, after the initial hesitancy, the top operators have welcomed the latest cabinet decision to relinquish 70% of its stake in Digital Nasional Berhad and this shareholding agreement will kickstart the commercial rollout of 5G. 

Going forward, 5G will be a strong driver for consumer upgrades, with projections for nearly 50% of shipments in 2023, up from 36% in 2022, IDC said. 

The looming merger between Digi and Celcom is set to make the new entity the largest telco operator in the country, it added.  

"Enticing consumers to stay with attractive 5G plans and bundles will be a high priority for Maxis and other telcos to remain competitive in the market," Ahmed said.