Wed, Nov 17, 2010
The Nation/Asia News Network
'Crazy growth' in smart-phone market

NEXT year will be the Year of the Smart Phone in Thailand, according to people in the industry.

Smart-phone sales are expected to double, more vendors will enter the market, and more smart-phone platforms will be available.

When asked about growth in their market, smart-phone vendors have a common expectation: smart phones will rise to represent about 30 per cent of the total mobile-phone market in 2011, and will make up more than 50 per cent of the market in 2012.

HTC (Thailand)'s country manager Nattawat Woranopakul forecasts "crazy growth" in smart phones next year, in a highly competitive market. Demand is expected to reach around 2.4 million units in 2011, or growth of 100 per cent above this year's 1.2-million units, he said.

HTC is planning aggressive marketing next year, with the launch of new smart phones operating on both Android and Windows Phone 7. The phone maker expects 300-per-cent growth in its business in Thailand.

To achieve that, HTC foresees the need not only for a full range of products, but also for a full marketing budget along with applications and services, Nattawat said.

"We aim to grow by three times. Therefore, our marketing budget is also set three-times higher than this year. This year's marketing budget was Bt160 million and that included pure marketing and support for our distributors," he said.

Next year, HTC will launch more than 30 smart-phone models around the world. At least six of them will appear in Thailand in about the first half of next year.

"We will be focused on both Android- and Windows Phone 7-based smart phones. These platforms have the biggest potential market. It is expected that by 2012, the combination of Android and Windows Phone 7 will represent a major part of the world smart-phone market," Nattawat said.

As well, HTC will launch two more models before the end of this year ??" an Android-based HTC Desire HD and a Windows Phone 7-based HTC HD7 ??" early next month and at the end of this month respectively.

"We will partner with DTAC to launch the HTC HD7 by the end of this month. Its price will depend on DTAC. The HTC HD7 will also be available at HTC's main distributor, SIS, and at HTC shops. We expect to sell 5,000 units before the end of this year," he said.

Nattawat said that competition in the smart-phone market would be based more on software solutions and applications. Apart from two app stores, including HTC's App-app store for Windows Phone 7 and HTC Sense app for Android phones, the company also offers its unique app, MyHTC.

In 2011, HTC plans to double the number of its retail outlets in Thailand, from 500 at the end of this year to 1,000. HTC began this year with only 200 outlets.

Currently, HTC is renovating its care centre in Bangkok to become an HTC Service Centre. The 120-square-metre centre, located at IT Mall, will have a repair zone for after-sales service; an experience zone in which prospective customers can try out HTC smart phones; and a training zone where people can learn to use them properly.

Moreover, the company will also pick up smart phones for repairs and return them to users with no charge for the delivery service.

"Everything we are planning to implement next year is aimed at gaining a bigger share of the smart-phone market," Nattawat said. "This year, HTC has nearly 10 per cent of the market, following sales growth of 69 per cent."

Samsung, another major player, is also preparing for an aggressive battle in the smart-phone market.

The head of mobile marketing in Thai Samsung Electronics' Telecommunication Unit, Sitthichoke Nopchinabutr, said his company expected the phone market in Thailand to grow by more than 100 per cent over the next two years.

Samsung is also aiming for a higher rate of growth in its smart-phone business, after sales growth of more than 50 per cent this year. It expects revenue from smart phones to rise from 20 to 25 per cent of its total revenue next year, and has a goal of increasing its share of the smart-phone market from 14 per cent this year to 30 per cent in 2011.

"The smart-phone market will see tough competition next year as many more vendors will come in. We are prepared to hold on to No 2 ranking in the smart-phone market. We will be more aggressive, for sure," Sitthichoke said.

Next year, Samsung will introduce 15 to 20 new smart-phone models using Android, Windows, and Brada operating systems. For every 50 smart phones using Windows, it will make 24 using Android and five using Brada.

As well as new devices, Samsung will swing more resources behind its production of applications and content. It is also planning to concentrate on online marketing, which is believed to be the most direct and effective channel for reaching its target customers, Sitthichoke said. Consequently, its budget for online marketing will increase significantly. Overall, its total marketing budget in 2011 will be about 10 per cent of its total revenue.

He said "very tough competition" in the smart-phone market began this year, when several vendors jumped in to grab a share of the high-growth market. Many of them are talking about software solutions and applications, rather than selling just the device. Many of them also regard trends in the smart-phone market as significant to the whole electronics industry, he said.

Sitthichoke said his company also had its own app store, called the Samsung App Store. Currently, more than 10,000 applications are available, both free and for sale.

In 2010, three main models generated most of Samsung's sales: Galaxy S, Galaxy Tab and Wave. Smart phones currently generate 10 to 20 per cent of Samsung's total sales.

Another big player, Nokia, is also planning a sharper focus on smart phones. The company uses its own platforms, Symbian and MeeGo.

Nokia (Thailand)'s general manager Shumit Kapoor said his company would introduce more models based on the Symbian 3 and MeeGo operating systems in Thailand next tear. At present, the C7 is Nokia's second Symbian 3 smart phone, following the E8 . Two more Symbian 3 smart phones, the C6-01 and the E7, will be launched before the end of this year.

"We will be a key vendor to drive the smart-phone market to become about 30 per cent of the total mobile-phone market in 2011. This will see smart phones increase from 18 per cent of all mobile phones this year. We plan to launch MeeGo smart phones in Thailand in several form factors and designs sometime next year," Kapoor said.

Similar to its rivals, Nokia is not only promoting its smart phones, but also its app store, called the Ovi Store. It offers thousands of apps, many of which are free. Games are the most popular apps, leading Ovi Store to record 2.7 million-downloads to date.

Nokia's new models approach the smart-phone market by offering solutions and services such as messaging, e-mail and navigation, so users can experience more mobile-phone applications, rather than simple voice-call usage.

"Thailand is very important for Nokia in the Southeast Asia region," Kapoor said.

Meanwhile, LG, which has not been an aggressive player in the smart-phone market this year, is planning to come out punching in 2011 and will be looking for a greater share of the market.

The head of marketing for LG Electronics (Thailand)'s Mobile Communication Department, Natthawach Siriwongsal, said LG would focus more on smart phones next year because demand for the devices was expected to grow rapidly.

He forecast that smart phones would account for about 40 per cent of all mobile phones in 2011. LG is aiming for a 25- to 30-per-cent share of the smart-phone market.

Next year, LG will introduce more than 10 smart-phone models in Thailand. All of them will be Android-based phones.

"This year, we have only two models available: the LG Optimus GT450 and the Optimus One P500, so we have only a small market share," Natthawach said.

The two other key players in Thailand's smart-phone market, the BlackBerry and the iPhone, have seen no fall-off in sales momentum. Apple's iPhone 4 was recently launched in Thailand and has already created huge demand. Research In Motion (RIM) is not only planning to introduce more of its BlackBerry models in Thailand, but is also promoting BlackBerry App World.

Recently, RIM held is BlackBerry Developer Day in Bangkok, following similar events around the world, inviting local and international developers to create profitable applications to sell via its App World.

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