Omdia: Southeast Asia smartphone market shipments decline 9% in 1Q26, as vendors prioritize profitability over share

LONDON: #Electronics--Latest research from Omdia shows that Southeast Asia’s smartphone market declined 9% year-on-year in 1Q26, with shipments totaling 21.6 million units. However, the standout metric was average selling price (ASP) rather than volume: the ASP reached a record high of $349 in 1Q26, up 19% year-on-year, as memory cost inflation reset device pricing across the region. The divergence between volume and value is a clear signal that the region’s vendor landscape is undergoing a structural repricing: brands are prioritizing ASP growth and margin protection over unit shipment growth, with several accepting significant volume losses in exchange for healthier per-device economics. As DRAM and NAND costs continue to rise into 2026, the region’s structurally price-sensitive consumer demand base is facing growing affordability pressure, with more than 60% of SEA smartphones priced below $200.

Vendor Rankings and Market Share Adjustments

• Samsung led the region with 4.6 million units and a 21% share, up 4% year-on-year, driven by a combination of a strong S26 launch and A-series volume drivers.
• OPPO ranked second with 4.2 million units, declining 17% amid operational corrections due to its combination with realme.
• Xiaomi placed third with 3.7 million units shipped, down 12% year-on-year, as portfolio-wide price hikes reduced channel appetite and constrained wallet allocation.
• TRANSSION ranked fourth with 3.4 million units, down 10%, with its competitively priced Infinix and TECNO models continuing to support strong positions in Indonesia and the Philippines.
• vivo completed the top five with 2.1 million units, down 27%, as the brand shifted focus toward profitability by pulling back from the affordable entry-level segment that typically anchors volume share.
• Apple ranked sixth at 1.8 million units, broadly flat year-on-year, with the strong performance of the iPhone 17 series exhibiting notably less price discounting than its predecessor at the equivalent stage.
• HONOR was the standout performer among tracked vendors, growing 28% year-on-year to 1.2 million units, with shipment growth in six of eight SEA markets despite regional decline.

Strategic Shifts Drive The Volume and Value Divergence

“The defining story of 1Q26 is ASPs reached an all-time high while volumes declined - and the two trends are closely linked. Memory cost inflation has raised device bill of materials (BoM) across the board, particularly in the entry and mid tiers where DRAM and NAND account for a larger share of total component cost. In response, vendors have raised prices and, importantly, managed supply more tightly to prevent channels from reverting to legacy discount levels.

For a region where the sub-$200 segment still account for the majority of volume, this creates a difficult balancing act: vendors must either pass through costs on to consumers, absorb margin compression, or reduce specifications and risk volume erosion. Each option carry trade-offs,” said Omdia Research Manager, Le Xuan Chiew.

The volume–value divergence remained the defining market dynamic of 1Q26. Southeast Asia smartphone shipments declined 9% year on year (YoY), yet market value grew 8%, indicating that growth was driven primarily by repricing rather than structural demand expansion. Despite softer volumes, vivo and OPPO recorded the strongest ASP growth among major vendors at 28% and 26% respectively, reflecting a strategic shift away from low-margin entry-level shipments toward a more profitability-focused strategy. In contrast, HONOR and Samsung used the period to accelerate market share gains through continued investment in brand building and channel expansion.

This trend is also becoming increasingly visible in product strategy. In Malaysia, for example, Xiaomi raised the price of the Redmi Note 15 4G to RM799 from RM699 for the previous Redmi Note 14 4G, effectively increasing the entry price of its Note series. Meanwhile, the 5G variant maintained its RM899 price point but shipped with lower RAM and storage specifications, highlighting the brand’s focus on preserving margins amid rising component costs. At the premium end, the Redmi Note 15 Pro+ also launched with a higher memory configuration, with the 12GB/512GB variant priced at RM1,899 compared with RM1,599 previously. Overall, this reflects a broader industry trend of vendors adjusting memory configurations and selectively raising prices to steer consumers toward higher-value variants, allowing brands to partially offset rising component costs without passing the full increase directly to end users.

In Singapore, HONOR’s rise to third place for the first time - supported by strong retail execution and momentum in its mid-range portfolio, particularly the X9d - highlights how targeted execution can still deliver share gains in selective mature markets. Looking ahead to 2H 2026, the key question is whether volume-led strategies remain sustainable as BoM costs continue to rise.

Country-level Performance Shows Mixed Results

“The country-level picture was more mixed than the regional headline suggests. Indonesia, the region’s largest market at 7.2 million units, recorded the steepest absolute decline, falling 17% year-on-year as elevated channel inventory from 4Q25 continued to normalize and consumers remained cautious amid persistent price pressure. The weakness was further exacerbated by a softer-than-expected Ramadan season and recent retail price increases, both of which weighed on replacement demand. Given Indonesia’s strategic importance to most Android vendors, the market slowdown had an outsized impact on their overall regional performance.

Thailand remained relatively resilient, posting 2% growth, supported by Samsung’s stronger positioning in the premium and upper mid-range segments, which helped offset continued softness in entry-level demand. Meanwhile, Vietnam and Malaysia declined 12% and 19% respectively, driven by a severe shipment contraction of more than 30% in the sub-$200 price segment,” said Omdia Senior Analyst, Sheng Win Chow.

Market Outlook and Future Risks

The overstocking and subsidy-driven volume strategies that defined Southeast Asia’s smartphone market in past years have now reversed. Sales channels across several key price segments are becoming increasingly understocked, enabling vendors to enforce stricter pricing discipline and even raise prices on several models already in the market. Omdia expects pricing and supply volatility to persist in the near term as vendors navigate supply shortages and weigh the demand impact of price increases.

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Fonte: Business Wire