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Indonesians go for China phones

  Photo: Turning to China-made phones. (Courtesy of Xinhua News Agency)
  Turning to China-made phones. (Photo courtesy of Xinhua News Agency)
Indonesians wanting mobile phones are keen on the offerings by Shenzhen-based mobile phone producers. These are devices described as, for example, Cdma 450 and MTK6577 Android 4.0. The bargains are many: a 50-unit carton of G'Five 9300 QWERTY phones sells for little more than US$2,000. That compares to a GPS Android 2.2 phone at between US$80 and US$100 per unit.

Such bargain basement mobile phone deals are thanks to the implementation of the ASEAN-China Free Trade Area (ACFTA) since 2003, under which China-made mobiles attract no import duties.

Such phones are by no means lacking in technological innovation either, which is another reason why the market is ready to support them, even if they're not the latest smartphone brands.

On store shelves, these phones sit beside better-branded models such as Lexus Bluetooth phones, which are aimed at the private automobile market. For Lexus, sales this year are expected at 50,000 units per month, chiefly through "brand bundling" with the Lexus car.

By comparison, overall sales volumes of China-made mobile phones represent an impressive 80% of the mobile market. Opportunities look better for the future despite more sophisticated models coming on display.

Dimitri Mahayana, Chief Executive of locally-based research body Sharing Vision, a telematic research institution, believes: "China-made cell phones will adopt the smartphone technology pioneered by BlackBerry, the iPhone and Google's Android, with supporting technology such as mobile TV."

Assuming the Mainland products retain their cost advantages, the market could be increasingly profitable. With 250 million mobile phone subscribers, Indonesia ranks fifth behind China, India, the US and Brazil, according to online Singapore research site, Casual Connect Asia.

Tellingly, Indonesia lags those countries for Internet usage, at around 40 million in a population of over 230 million, according to Casual Connect. Yet, Indonesia's gathering band of Internet users represents the world's fourth largest user of social network site Facebook and fifth largest user of Twitter.

US consultancy Frost & Sullivan said the Indonesian market is experiencing an era when the "voice"-driven sector is maturing and the mobile Internet is introducing itself. The market potential is huge; in 2010, the average Indonesian held only 1.6 SIM cards, a very low unique subscriber rate.

The "non-voice" revenues are being taken up - rising from 33% two years ago to 40% last year, said Frost & Sullivan. Yet Indonesia lags far behind neighbours Malaysia and Singapore in broadband penetration.

The high level of interest by Indonesian consumers in China-sourced mobile phones will quickly turn to China-sourced smartphone technology, said Asep Suhendi, Head of the West Java Region for Indonesian telecom operator, PT Indosat. This is the reason why Indosat works so often on bundling programmes as mobile phone content for China-made devices, he explained.

from Rachel Kurniawan, Jakarta Consultant

Organisation Tel/Fax/Email/Web
ASEAN China Free Trade Area (ACFTA)
Sharing Vision Tel: (62) 22-710-1403
Fax: (62) 22-727-1057
Email: sharing_vision@yahoo.com
Web: http://global.sharingvision.biz

Content provided by Picture: HKTDC Research
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