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Smartphone, tablet market soars in South Asia

Posted: 25 Sep 2013     Print Version  Bookmark and Share

Keywords:Frost & Sullivan  smartphone  tablet market  mobile internet service 

Smartphone and tablet market in South Asia is experiencing sound growth, bolstered by the influx of low-cost devices and the rising penetration of mobile internet services. Frost & Sullivan noted that this growth could be impacted due to the rampant grey market and steep import duties on such devices.

The study finds that market revenue is expected to reach Rs.2.10 lakh crore ($33.33 billion) in 2019 from Rs.27,987.42 crore ($4.45 billion) in 2012. Smartphone sales will contribute to almost 70 per cent of the total revenue, with the rest accounted for by tablet sales. Out of the three countries studied, India, Sri Lanka and Bangladesh, India will be the largest contributor to market revenues.

"Buoyed by the availability of mobile internet services, end users are using smartphones as their primary medium for internet access," said Frost & Sullivan's information & communication technologies research analyst. "The availability of a healthy mobile application ecosystem that provides entertainment as well as utility will further boost the sale of smartphones. For tablets, designing dedicated applications will further spur their uptake."

Demand will continue to soar owing to falling device prices caused by the advent of user-friendly, open-source Android devices and the decreasing costs of components such as displays, chipsets and memory chips. Intense competition among the vendors in the region has also reduced price points. Despite the drop in price, the total cost of device ownership remains high, reining in adoption. Regulatory requirements such as high import duties on mobile handsets have escalated prices of the handsets. In fact, Bangladesh has a 12.5 per cent import duty on all mobile handsets and India has announced a six per cent duty on phones costing greater than Rs.2,515.72 ($40).

Another concern that has the potential to severely impact market development is the widespread proliferation of grey channel sales which in turn, affect the profitability of authorised vendors. In countries such as Sri Lanka and Bangladesh, grey channels make up for as much as 50 per cent of the overall sale volumes. The lack of a robust distribution system and after-sales support in the semi-urban and rural regions adds to the existing challenges. In a country like India with geographical and linguistic diversity, it is vital to have a strong, localized distribution channel that will cater to varied end-user needs.

"To appeal to the wide consumer base in the region, offering well-developed mobile applications and mobile broadband ecosystems is very essential," added the analyst. "Therefore, vendors must constantly invest in technology innovation as well as provide effective pricing models to enable market expansion."

For more statistics and forecasts, click here.

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