Mobile Phones in Malaysia

MOBILE PHONES IN MALAYSIA
Euromonitor International
August 2011
LIST OF CONTENTS AND TABLES

Headlines ..................................................................................................................................... 1
Trends .......................................................................................................................................... 1
Competitive Landscape ................................................................................................................ 2
Prospects ..................................................................................................................................... 2
Category Data .............................................................................................................................. 3
Table 1
Table 2
Table 3
Table 4
Table 5
Table 6
Table 7
Table 8
Table 9
Table 10
Table 11
Table 12
Table 13
Sales of Mobile Phones: Volume 2005-2010 ............................................... 3

Sales of Mobile Phones: Value 2005-2010 .................................................. 3
Sales of Mobile Phones: % Volume Growth 2005-2010 ............................... 3
Sales of Mobile Phones: % Value Growth 2005-2010 .................................. 4
Mobile Phones Company Shares 2006-2010 ............................................... 4
Mobile Phones Brand Shares 2007-2010..................................................... 4
Sales of Mobile Phones by Distribution Format 2005-2010.......................... 5
Forecast Sales of Mobile Phones: Volume 2010-2015................................. 5
Forecast Sales of Mobile Phones: Value 2010-2015.................................... 5
Forecast Sales of Mobile Phones: % Volume Growth 2010-2015 ................ 5
Forecast Sales of Mobile Phones: % Value Growth 2010-2015 ................... 6
Sales of Smartphones by Operating System 2008-2010.............................. 6
Sales of Mobile Phones by Type of Contract 2005-2010 ............................. 6
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HEADLINES
Mobile phones register 14% value growth to reach RM2.6 billion in sales for 2010
Improved consumer sentiment boosts sales
Smartphones shows highest value growth at 29%
Average unit price of mobile phones drops from RM673/unit in 2009 to RM664/unit in 2010
Competitive environment continues to be dominated by international companies
Mobile phones is expected to post a constant value CAGR of 5% to reach RM3.4 billion by
2015
TRENDS
Mobile phones saw 14% value growth to record RM2.6 billion in sales for 2010. This growth
was boosted by improved consumer sentiment since the global financial crisis. With mobile
phone usage becoming more and more pervasive, consumers eagerly upgraded to the latest
mobile phone models.
Smartphones saw higher value growth of 29% as compared to feature phones which declined
by 10%. This corresponded with a 50% increase in volume sales for smartphones over a 3%
decline for feature phones. As smart phones advance in computing capabilities and better
connectivity, consumers have readily swapped their feature phones for smartphones. There
was also considerable effort from local telecommunications companies such as Maxis and
Celcom to offer smartphones bundled with attractive phone plans. For example, Celcom
offered its customers the new iPhone 4 with perks such as free 6GB data usage, free calls
within the network as well as free extended warranty.
The unit price of mobile phones dropped from RM673/unit in 2009 to RM664/unit in 2010.
Consumers benefitted from the competition in mobile phones with manufacturers keen to offer
the latest mobile phones at attractive prices.
The most common smartphone operating system in 2010 was Symbian, which was
maintained by Nokia. Nokia phones were extremely common due to their high affordability
and product reliability. Hence they accounted for 47% of smartphone volume sales. However,
2010 saw other competitors closing in. Smartphones featuring operating systems such as
iOS, Android and Blackberry OS climbed steadily in volume shares. This boiled down to the
various smartphones appealing to different users. For example, the iOS-supported iPhone
was popular among those who appreciated Apples branding image and the many apps
available. On the other hand, Blackberry OS on the Blackberry appealed to those who
appreciated its function as a personal digital assistant.
More consumers were switching from purchasing handsets to monthly subscriptions. This is
because smartphones were still expensive. However, mobile phone operators normally
offered them at a discounted price when users signed up for a subscription. This boosted the
affordability of a smartphone and thus, more consumers have been taking up monthly
subscriptions.
With the host of choices available to consumers, mobile phones have become more
affordable. Mobile phone operators have also taken steps to improve coverage, especially 3G
coverage, as well as reception to boost mobile phone usage. Hence, mobile phones have
become a part of many Malaysians lives with function and design emerging as the most
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important factors that consumers take into consideration when it came to purchasing a mobile
phone.
Electronics and appliance specialist retailers were the most important retail channels in
mobile phones. This was because consumers could buy mobile phones through a
subscription service. They could also trade in their old mobile phones to upgrade to a newer
model.
COMPETITIVE LANDSCAPE
Nokia garnered the most volume shares in feature phones at 32%. This was due to the
overwhelming popularity of its Nokia phones, which are well-known for their durability and
user-friendliness. The selection of phone models is wide, catering to different consumer
preferences.
Nokia also held the top position in volume shares for smartphones at 45%. However, this
figure has been decreasing rapidly over the review period as other companies such as Apple
and Research in Motion Ltd have proven to be strong competitors. This is because
smartphones such as the iPhone and the Blackberry have shown innovations which appeal to
many smartphone users.
Domestic companies were largely outdone by international brands in terms of innovation and
resources. However local company CSL Group bucked the trend when it began tapping into
imitations. For example, its product Blueberry looks like the smartphone Blackberry. However
it functions as a feature phone, boasting features such as a music player and a camera. By
manufacturing feature phones that look similar to more expensive smartphones, CSL Groups
products greatly appealed to less affluent locals.
The hottest mobile phone product launch in 2010 was the iPhone 4. With many consumers
already familiar with the functions on the iPhone 3 and iPhone 3G, the iPhone 4 was very
well-received. Featuring a new processor, a redesigned structure, a gyroscopic sensor as well
as a LED-backlit liquid crystal display, the iPhone 4 was even more powerful and easier to
use. Consumers made a beeline for this smartphone when it came out, queuing up early to
get their hands on it.
Nokia launched several new phones as well, such as the X6 and the N8 smartphones. The
biggest selling point for the N8 was the 12-megapixel camera, which was what many felt was
the best camera in a phone. The N8 was the first device to use the Symbian ^3 OS. It also
featured more storage, with 16GB of built-in storage and was expandable for up to 48GB with
a micro SD card.
Not to be outdone, Research in Motion Ltd launched the BlackBerry Torch 9800 in 2010. This
was the worlds first smartphone that had a BlackBerry keyboard and full touch screen. Users
could easily transition between the touch screen, trackpad and keyboard interfaces. Its Web
Kit-based browser also gave users a quicker and more efficient web-browsing experience.
The presence of big international companies saw no mergers, acquisitions or strategic
alliances taking place from 2008 to 2010.
PROSPECTS
Mobile phones is expected to post a constant value CAGR of 5% to reach RM3.4 billion by
2015. However, demand for mobile phones may see a slowdown in demand towards the end
of the forecast period as the product reaches saturation point.
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The Samsung Galaxy Tab as well as future tablets which boast cellular functionality could
rival the demand of smartphones. This is because such devices would have a much better
display. However, having a larger display than mobile phones may also work to its detriment
as it reduces portability.
Android gained a healthy following over the review period and this is expected to continue.
Many manufacturers base their smartphones on this operating system. Current brands
include Sony Ericsson, Motorola and HTC. Android has achieved great popularity due to its
user friendliness and software suite which houses integration with Google's proprietary
applications like Maps, Calendar, and Gmail. Androids main adopters are expected to release
a new extended range of dual-core phones and even incorporating 3D displays into their
products. Hence, the Android OS will see increasing popularity over the forecast period.
The Windows Phone 7 is also expected to perform well on the smartphone market. By
integrating the operating system with third party and other Microsoft services, it brings a new
user experience that other companies might be looking to emulate.
Unit prices for mobile phones are expected to increase over the forecast period as consumers
switch to more expensive smartphones. Manufacturers will be seeking to lower their
production costs in order to increase the affordability of their products in an attempt to
persuade consumers to trade up.
Product launches can expect to perform well in the short-term, especially for smartphones.
With an increasingly wired society, consumers will soon be expecting their phones to provide
even more web-based functions.
CATEGORY DATA
Table 1
Sales of Mobile Phones: Volume 2005-2010
'000 units
Feature Phones
Smartphones
Mobile Phones
Source:
2005
2006
2007
2008
2009
2010
2,813.5
2,813.5
2,769.2
144.5
2,913.7
2,527.7
474.2
3,001.9
2,610.4
794.0
3,404.4
2,272.0
1,183.5
3,455.5
2,203.9
1,775.2
3,979.1
Euromonitor International from official statistics, trade associations, trade press, company research,
store checks, trade interviews, trade sources
Table 2
Sales of Mobile Phones: Value 2005-2010
RM million
Feature Phones
Smartphones
Mobile Phones
Source:
2005
2006
2007
2008
2009
2010
1,584.7
1,584.7
1,435.6
218.2
1,653.8
1,157.1
629.0
1,786.1
1,366.0
1,189.0
2,555.0
913.1
1,412.0
2,325.1
821.7
1,821.5
2,643.2
Table 3
Sales of Mobile Phones: % Volume Growth 2005-2010
% volume growth
Passport
2009/10
2005-10 CAGR
2005/10 Total
-3.0
50.0
15.2
-4.8
7.2
-21.7
41.4
Feature Phones
Smartphones
Mobile Phones
Source:
Table 4
Sales of Mobile Phones: % Value Growth 2005-2010
% current value growth

2009/10
2005-10 CAGR
2005/10 Total
-10.0
29.0
13.7
-12.3
10.8
-48.1
66.8
Feature Phones
Smartphones
Mobile Phones
Source:
Table 5
Mobile Phones Company Shares 2006-2010
% retail volume
Company
Nokia (M) Sdn Bhd
Samsung Malaysia
Electronics Sdn Bhd
Sony Ericsson Mobile
Communications AB
Motorola Malaysia Sdn Bhd
Apple Computer Systems
Malaysia Sdn Bhd
Research in Motion Ltd
Siemens Malaysia Sdn Bhd
Others
Total
Source:
2006
2007
2008
2009
2010
26.5
22.6
32.2
23.7
35.9
23.5
37.1
23.0
37.9
21.1
9.8
16.2
17.3
16.0
15.0
15.4
-
9.6
-
9.4
-
8.0
5.0
7.0
6.7
0.5
3.9
21.3
100.0
1.7
16.7
100.0
2.7
11.2
100.0
4.1
6.8
100.0
5.8
6.5
100.0
Table 6
Mobile Phones Brand Shares 2007-2010
% retail volume
Brand
Nokia
Samsung
Sony Ericsson
Motorola
iphone
Blackberry
BenQ
Siemens
Company
2007
2008
2009
2010
Nokia (M) Sdn Bhd

Samsung Malaysia
Electronics Sdn Bhd
Sony Ericsson Mobile
Communications AB
Motorola Malaysia Sdn Bhd
Apple Computer Systems
Malaysia Sdn Bhd
Research in Motion Ltd
32.2
23.7
35.9
23.5
37.1
23.0
37.9
21.1
16.2
17.3
16.0
15.0
9.6
-
9.4
-
8.0
5.0
7.0
6.7
1.7
-
2.7
-
4.1
-
5.8
-
Passport
Others
Total
Source:
16.7
100.0
11.2
100.0
6.8
100.0
6.5
100.0
Table 7
Sales of Mobile Phones by Distribution Format 2005-2010
% retail volume
Store-Based Retailing
- Grocery Retailers
- - Discounters
- - Hypermarkets
- - Supermarkets
- Non-Grocery Retailers
- - Electronics and
Appliance Specialist
Retailers
- - Mixed Retailers
- Other store-based
retailing
Non-Store Retailing
- Direct Selling
- Homeshopping
- Internet Retailing
Total
Source:
2005
2006
2007
2008
2009
2010
99.3
16.0
13.6
2.4
79.0
70.0
99.2
16.0
13.6
2.4
79.0
70.0
99.1
16.0
14.0
2.0
78.5
69.5
98.9
16.0
13.7
2.3
78.5
72.0
98.7
15.5
13.5
2.0
78.5
75.0
98.5
15.1
13.3
1.8
78.9
76.4
9.0
4.3
9.0
4.2
9.0
4.6
6.5
4.4
3.5
4.7
2.5
4.5
0.7
0.7
100.0
0.8
0.8
100.0
0.9
0.9
100.0
1.1
1.1
100.0
1.3
1.3
100.0
1.5
1.5
100.0
Table 8
Forecast Sales of Mobile Phones: Volume 2010-2015
'000 units
Feature Phones
Smartphones
Mobile Phones
Source:
2010
2011
2012
2013
2014
2015
2,203.9
1,775.2
3,979.1
2,049.6
2,449.8
4,499.4
1,824.1
3,037.8
4,861.9
1,368.1
3,493.4
4,861.5
930.3
3,807.8
4,738.1
465.2
3,998.2
4,463.4
Euromonitor International from trade associations, trade press, company research, trade interviews,
trade sources
Table 9
Forecast Sales of Mobile Phones: Value 2010-2015
RM million
Feature Phones
Smartphones
Mobile Phones
Source:
Table 10
2010
2011
2012
2013
2014
2015
821.7
1,821.5
2,643.2
690.3
2,295.1
2,985.3
545.3
2,777.0
3,322.3
376.3
3,082.5
3,458.8
240.8
3,252.0
3,492.8
113.2
3,300.8
3,414.0
trade sources
Forecast Sales of Mobile Phones: % Volume Growth 2010-2015
Passport
% volume growth
Feature Phones
Smartphones
Mobile Phones
Source:
2014/15
2010-15 CAGR
2010/15 Total
-50.0
5.0
-5.8
-26.7
17.6
2.3
-78.9
125.2
12.2
trade sources
Table 11
Forecast Sales of Mobile Phones: % Value Growth 2010-2015
% constant value growth

2010-15 CAGR
2010/15 TOTAL
-32.7
12.6
5.3
-86.2
81.2
29.2
Feature Phones
Smartphones
Mobile Phones
Source:
trade sources
Table 12
Sales of Smartphones by Operating System 2008-2010
% retail volume
Windows
iOS
Android
Symbian
BlackBerry OS
Other
Total
Source:
2008
2009
2010
11.0
5.2
14.6
14.0
51.7
12.0
2.5
100.0
5.5
15.0
19.0
46.7
13.0
0.8
100.0
75.0
11.5
2.5
100.0
Table 13
Sales of Mobile Phones by Type of Contract 2005-2010
% retail volume
Monthly Subscription
Pay as You Go
Phone Only
Total
Source:
2005
2006
2007
2008
2009
2010
11.3
0.7
88.0
100.0
14.2
0.8
85.0
100.0
16.0
1.0
83.0
100.0
17.8
1.2
81.0
100.0
20.7
1.3
78.0
100.0
22.6
1.4
76.0
100.0

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