How Apple broke the dominance of Android brands in Southeast Asia?

Growing wealth in Southeast Asia has prompted many young people to ditch cheap Chinese smartphones for iPhones.

Apple đã phá vỡ sự thống trị của các thương hiệu Android ở Đông Nam Á như thế nào?

Apple has broken the dominance of Android brands in Southeast Asia.

Yuni Pulungan, 28, a project manager at a non-profit in Jakarta, had always considered an iPhone a luxury item on her shopping list. But when her Android phone from 2019 ran out of storage and its camera started to degrade, she started considering upgrading to a better phone that would give her more fun new features and last longer.

In April 2023, after nearly a year of careful research and deliberation, Pulungan decided to open her wallet for an iPhone 13. “The iPhone is durable, the camera doesn’t shake when recording videos, and the sound is good,” Pulunga said. “In addition, the high price of $798 — more than double the average monthly salary in urban Indonesia — was somewhat “softened” by the commercial refund policy from the e-commerce site where she bought the iPhone 13.”

Pulungan is not the only one who is bullish on the iPhone. According to research firm Counterpoint, Apple’s iPhone sales in Southeast Asia increased 18% in the first three months of 2023 compared to the same period last year. Demand for iPhones was particularly strong in Indonesia and Vietnam, even as smartphones reached saturation point elsewhere in Southeast Asia.

Young professionals who have switched from Android to iOS in the past 12 months say they are drawn to the iPhone's excellent build, camera, and intuitive operating system. They say they will continue to buy iPhones as long as the brand's quality remains consistent.

Historically, Apple has struggled in Southeast Asia. In Indonesia, the world’s fourth-largest country, Chinese companies like Oppo, Vivo, Xiaomi and Realme have dominated smartphone sales, with premium Android phones priced as low as $500. Chinese brands have done a much better job than Apple of localizing their marketing, as well as building goodwill with local communities through job creation and disaster relief initiatives.

But Apple has been making strides in Indonesia on the strength of its product quality and the growing wealth of Southeast Asia, even amid the Covid-19 pandemic. Apple’s popularity in the region has been boosted by the launch of the iPhone 13 and 14, as well as consumer perceptions that Apple makes high-quality products, according to Glen Cordoza, senior analyst at Counterpoint.

“A lot of consumers in emerging economies start with low-cost phones. But as they grow [economically], a lot of consumers… move to iOS because they have a certain status. You see that in a lot of other countries,” said Glen Cordoza.

Indonesia has both a rapidly growing middle class and a prominent ultra-rich class. The owner of an iPhone store in Jakarta said that soon after the iPhone 14 was released, parents were looking to buy it for their high school-aged children. They said they wanted the latest version so their children could have a more comfortable experience using their phones for gaming and social media.

The region’s young population is also helping Apple in the region, said Le Xuan Chiew, an analyst at Singapore-based tech research firm Canalys. “The middle class that Apple has traditionally targeted has been mature consumers. Now [Apple] is targeting more Gen Z, more young people,” Chiew said.

Apple has just three physical locations across the region: in Singapore, Thailand, and Malaysia. But the company is expanding in other ways. In May 2023, Apple opened its first official online store in Vietnam. In March, Indonesian electronics brand Erajaya, which is also a major licensed reseller of Apple products in the country, opened a Premier Partner-level store in Jakarta—a store that offers a customer experience that closely resembles an official Apple Store. (Erajaya operates a chain called iBox, which offers the atmosphere and service of an Apple Store and is the closest equivalent in the country.)

Counterpoint’s report chronicles a turbulent economic period in Southeast Asia. But Apple has sought to sell to a premium audience that isn’t necessarily the elite, creating bundling programs with local carriers and introducing installment payment plans. Overall, Apple has kept the iPhone 14 at a similar price point to the iPhone 13, despite the new features and materials.

“What Apple is trying to do is make it more affordable for these audiences,” Chiew said.

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