Ericsson insight reveals Malaysia positioned for strong growth of smartphones and tablets

• Smartphone usage numbers in developing Asia are projected to increase by more than four-fold between 2011 to 2016, due to the emergence of low-cost, mass-market smartphones which will encourage higher levels of adoption

• Smartphone penetration among Internet users in Malaysia has the potential to rise from 47% to 73% and tablet penetration to increase threefold from 14% to 48% by the end of the year based on the consumers expressed interest.

• Telecommunications operators need to ensure that their networks are smartphone-ready, capable of delivering superior coverage, speed and reliability and able to handle the demands of continued mobile data growth.

In a recently-concluded analysis by Ericsson ConsumerLab in Southeast Asia and Oceania, it was revealed that smartphone users, among internet users in Malaysia are expected to increase significantly from 47% to 73%, making it the country with biggest growth potential in the region, based on expressed interest from the surveyed consumers.

The analysis shows that the popularity of smartphones is not only limited to mature markets – an increasing number of people in developing nations are being exposed to their first Internet experience on smartphones. This means that rising usage is opening up a new platform for operators to access the largely untapped data market.

Steven Tai and Afrizal Abdul Rahim of Ericsson Malaysia.

In developing Asia, where current overall smartphone penetration is estimated at a mere five percent, smartphone usage numbers are projected to increase by more than four-fold in the next five years, or between 2011 and 2016 .

“In Malaysia, non-smartphones are still popular among consumers. But smartphones are expected to become more dominant in the Malaysian market in the near future,” said Afrizal Abdul Rahim, Head of ConsumerLab South East Asia & Oceania. “The key motivating factors for future smartphone users are internet surfing (39%), upgrade from current devices (34%), and usage of apps (29%). Smartphone development in Malaysia is expected to reach a mature stage in the near future, as it offers consumers a single device which meets all their communication needs.”

Smartphones aside, tablets are already making waves on their own, as newer and more affordable variations of tablets become increasingly available.

“Tablet penetration in Malaysia is expected to triple in the near future (from 14% to 48%). Currently, Singapore has the highest penetration of tablets in the region followed by Australia,” said Afrizal. “Drivers for future tablet purchases vary from country to country; In Malaysia, Internet surfing is the main driver followed by portability and convenient size of the tablet.”

Analysis of the research data indicates that voice calls and SMS continue to be important among current Smartphone users. However, Internet browsing, social networking, apps usage and instant messaging are also key drivers for current smartphone use and are expected to continue to grow.

Looking at the usage that is driving growth in mobile data, the most popular mobile applications used by Malaysians are those related to communication, gaming and TV/ video.

“We also foresee that mobile consumers will likely show great interest in apps related to banking and entertainment.” Afrizal shared.

These findings suggest that future growth will primarily be driven by mobile data.  How can operators in the region best capitalize on this fast-growing segment? Steven Tai, Head of Strategy & Marketing, Ericsson Malaysia & Sri Lanka, explains that “rising smartphone usage means operators need smart offers – and a smart network.”

Operators must ensure their networks are smartphone-ready, and are capable of delivering superior coverage, speeds and reliability. “To increase cost efficiency and revenue potential, smartphone time on 3G networks must be maximized,” Tai said. “Smart networks, which are user, service and content-aware, call for a holistic approach to network architecture with policy control that enables differentiated services and optimization of network resources.”

Tai added: “Globally, total smartphone subscriptions are expected to reach around 3 billion in 2017 with at least 50% of the traffic delivered through Ericsson networks. Malaysia needs to look to superior networks to cope with the increase in traffic. We at Ericsson are poised to embrace the substantial increase of mobile data traffic that is due to the positive uptake of smartphones and tablets in Malaysia, within the region and around the world.”