• 5G smartphone shipments in Indonesia rose 159% YoY in Q2 2022.
• The growth was driven by the $150-$349 and >$500 price bands.
• Samsung, OPPO, vivo and Xiaomi led the 5G smartphone sales growth.
• Tie-ups between mobile operators and the industrial sector can push 5G smartphone use.

Jakarta, London, Boston, Toronto, New Delhi, Beijing, Taipei, Seoul – October 24, 2022

Indonesia’s 5G smartphone shipments grew 159% YoY in Q2 2022, according to Counterpoint Research’s Monthly Indonesia Smartphone Channel Share Tracker. Samsung, OPPO, vivo and Xiaomi led this growth.

Source: Counterpoint Monthly Indonesia Channel Share Tracker

5G smartphones come with better, newer specifications to support the latest connectivity technology. This makes them overall a better offering than a 4G smartphone in the same price segment. From consumers’ perspective, after deciding their preferences related to “usual” specifications like RAM, display and battery, they could consider 5G to keep their smartphone future-ready. Therefore, consumers treat 5G as a value addition till they are offered 5G services by the operators. It is this factor that is driving the growth of 5G smartphones.

Source: Counterpoint Monthly Indonesia Channel Share Tracker

Interestingly, 5G smartphone market growth is moving away from the mid-price segment, with the sub-$350 and >$500 price bands accounting for nearly three-quarters of all shipments. Last year’s dominant mid-band lost more than 50% of its share YoY in Q2 2022.

Growth in the lower tiers is being driven by Redmi and Samsung, with sustained consumer demand for their Note 10 5G and A22 series devices, both of which have been available since H1 2021. In the premium segment, Apple and Samsung dominate with almost 60% share.

The attractiveness of 5G smartphone specifications in the <$350 segment could lead to a shrinking of the mid-price tier. Given the competitive specifications for ROM, RAM and battery capacity, consumers prefer prices below $350 for a 5G smartphone.

Industrial sector can push 5G smartphone use

Ever since the introduction of 5G services in Indonesia in 2021, their spread has been selective, and the operators have chosen to focus more on serving the industrial sector. On the other hand, 4G has a much wider consumer base. But the country’s 5G smartphone shipments have continued to increase.

The aggressive promotion of 5G smartphones by OEMs, however, has failed to significantly convince the Indonesian mobile operators into expanding their 5G networks. This is mainly due to limited frequency availability and the absence of strong use cases on the consumer side. To resolve the frequency issue, the government recently conducted an auction for additional frequencies, such as 2.1 GHz which was won by Telkomsel. Another auction is expected soon for the low-band 700 MHz. The other option is to share frequencies among mobile operators.

Collaboration between mobile operators and enterprises (B2B) to utilize 5G for the industrial sector can increase demand on the consumer front as well. Advertising and marketing areas can prove to be low-hanging fruits in this direction. Enterprises can also leverage 5G to be used by consumers in Metaverse.

Considering that the mobile operators have been utilizing 4G and 5G together, OEMs need to keep dual SIM slots for both 4G and 5G. Also, this way a consumer can choose 4G and 5G services from different operators, considering limited 5G coverage. Smartphone OEMs should take into account what frequencies are available and what are in the regulatory pipeline. The current 5G network was built upon the existing 4G network and these frequencies are in low and mid bands. 2.3 GHz, 2.6 GHz and other high bands can be considered for future 5G use.