Malaysia’s phone shipments declined by 28.8% in Q1 2022, why Malaysians buy fewer phones this year?

As Malaysia starts to recover from the financial impact of the pandemic, IDC has reported a decline in overall smartphone shipments in the country as much as 28.8% year over year (YoY) or 21.7% quarter over quarter (QoQ) for Q1 2022. It is also projecting a decline of 5% for the Malaysian smartphone market in 2022.

According to IDC, the drop in smartphone shipments was due to supply challenges for low-end 4G models especially from Chinese vendors which impacts volumes and allocations. In addition, the increased cost of living in Malaysia since the start of 2022 would affect consumers’ budget and spending considerations for smartphones.

IDC Malaysia Market Analyst Ahmed M. Ahmed said as Malaysians were able to celebrate Ramadan and Raya freely this year without restrictions after two years, the locals would spend more money on clothings, domestic travels and other seasonal leisure activities. This could possibly lead to a delay of smartphone purchases until the second half of the year or when there’s a better supply of affordable models.

Among the top 5 smartphone vendors, Samsung is currently number one with a market share of 33.9%, followed by Xiaomi with a market share of 24.3%. The three BBK Electronics brands command third, forth and fifth place with Oppo taking 12.9% market share, followed by Vivo with 11.7% and Realme at 7.8%.

A total of 2.3 million smartphones were shipped in Q1 2022 versus 3.2 million smartphones shipped in Q1 2021. Among the top 5, Xiaomi is the only brand to recorded a QoQ growth of 5% versus Q4 2021.

Last year, the Malaysian smartphone market grew by 10.6% and this was partly driven by government subsidies. This includes the Program Jaringan Prihatin which offered device subsidies of RM300 to 8 million eligible Malaysians. The government’s plan to shutdown 3G networks by the end of 2021 has also helped to accelerate migration of 3G to 4G smartphones.

Another major factor to drive new smartphone shipments is the adoption of 5G. However, looking at the current statemate between Digital Nasional Berhad and the big four telcos such as Celcom, Digi, Maxis and U Mobile, consumers are in no hurry to switch. Yes 5G is currently the first and only telco in Malaysia to offer 5G services but the coverage areas are still very limited. The telco under YTL Communications are currently offering free 5G phones if you sign up for their new Infinite postpaid plans with a 36-month contract.

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