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Asia Pacific’s smartphone market declines by 20% during pandemic

Caitlin Ashworth

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Asia Pacific’s smartphone market declines by 20% during pandemic | Thaiger
PHOTO: Unsplash: William Iven

“The region’s smartphone market was hardest hit in the second quarter when many countries here entered lockdown mode. This was also when we started observing new trends emerging and the corresponding shifts in consumer demand for durable goods.”

People are buying fewer smartphones this year. The once robust and thriving industry has been on a downward slope in the Asia Pacific region with shift in customer demand hitting during the coronavirus pandemic. 13 of the 16 smartphone markets tracked, registered double digit declines. Only Taiwan managed to turn in slight growth.

In January to July 2020, the smartphone market value shrunk by 20% to reach just over USD 119 billion, nearly USD 30 billion less than the same period in 2019. Overall, the region’s consumers bought around 329 million smartphones, 97 million units fewer than 2019.

According to the latest GfK Point of Sales tracking of APAC’s smartphone sector, Taiwan is the only market which managed to still turn in marginal growth of 1%, while the rest of the 15 markets reported wide ranging declines in market value, from the single digit levels seen in Indonesia with -4% and Thailand with -7% to the higher double digit drops reported in India and Singapore, both with -42%.

As the first market affected by the pandemic, China’s smartphone market managed to rebound faster when compared to the rest of the major markets in the region. Its overall sales value in January to July recorded the least impact, at -15%, compared to Korea with -17%, and Japan with -33% and India with -42%.

“The region’s smartphone market was hardest hit in the second quarter when many countries here entered lockdown mode. This was also when we started observing new trends emerging and the corresponding shifts in consumer demand for durable goods,” highlighted Alexander Dehmel, Market Insights Lead APAC at GfK. “Based on the broad range of categories that GfK tracks, consumers started purchasing more products that support at home requirements (work, cook, entertainment), moving away from mobility-related gadgets such as smartphones and wearable devices.”

The onset of the pandemic and its negative impact on the economy did not appear to dampen consumers’ enthusiasm towards 5G smartphones, specifically in China and Korea. GfK’s latest report reflects strong consecutive month-on-month deepening volume penetration of 5G smartphone to reach 51% and 40% in China and Korea respectively in July. The other market in Asia Pacific which registered strong uptake is Hong Kong where over one in every four, or 29%, smartphones sold in July was 5G enabled.

“Although only six markets in the region have begun rolling out 5G services, already one in five (21%) of total smartphone sales across all of Asia Pacific, or nearly 62 million smartphones sold in the first seven months are 5G enabled—driven predominantly by China and Korea,” noted Dehmel. “Aside from the fact that these markets had a head start with the earlier rollout of 5G services, much of the high adoption rate is contributed by the fact that these markets are home to some of the world’s largest smartphone manufacturers, offering consumers there first access to the latest 5G mobile devices,” highlighted Dehmel.

Another key observation is that the pandemic has altered consumer spending on smartphones. Findings on the APAC smartphone market from the first half year revealed the rising popularity of models from the entry and low to mid-range segments that offer value features at affordable prices. While the dominant price segment in the region’s emerging markets continues to be USD 100 – 200, which accounted for 56% of total market share, an evident shift is seen in the developed markets from the USD >800 to USD 400-600 price segment.

“We are expecting some recovery in the closing quarter into 2021, under the assumption that the Covid-19 situation improves and remains under control in the local markets,” said Dehmel. “The region’s smartphone market should be back on track to growth by second half of 2021, driven largely by the much anticipated 5G devices that would be progressively launched into the key 5G markets at prices that are more affordable for mass adoption.”

SOURCE: Press Office

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Caitlin Ashworth is a writer from the United States who has lived in Thailand since 2018. She graduated from the University of South Florida St. Petersburg with a bachelor’s degree in journalism and media studies in 2016. She was a reporter for the Daily Hampshire Gazette In Massachusetts. She also interned at the Richmond Times-Dispatch in Virginia and Sarasota Herald-Tribune in Florida.

Economy

Officials not worried Thailand remains on US currency watch list

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Officials not worried Thailand remains on US currency watch list | Thaiger
PHOTO: Thailand is on the watch list for possible currency manipulation.

Thailand remains on the United States Treasury’s “Monitoring List” of countries whose currency trade practices need to be watched, though Thai officials say they are not worried. US Treasury Secretary Janet Yellen releases a foreign exchange report twice a year including labelling alleged currency manipulators and flagging suspect trading partner countries to be monitored.

The Bank of Thailand said remaining on the US currency watch list poses no threat to Thai businesses or the government’s ability to enact policies to promote financial stability. They stress that Thailand has never manipulated currency, using the exchange rate to get a competitive edge or an unfair trade advantage over other countries.

This most recent report tags 11 countries as warranting a closer watch: China, Germany, India, Ireland, Italy, Japan, Malaysia, Mexico, Singapore, South Korea, and Thailand. Mexico and Ireland were the 2 new inclusions, not on the previous report in December 2020. Also in the report, the US Treasury Department toed the line of accusing Switzerland, Taiwan, and Vietnam of manipulating currency.

They stated yesterday that the 3 countries had crossed the line of 2015 US trade laws, but didn’t officially brand them as currency manipulators. The thresholds of that 2015 rule include either global current account surplus or foreign currency intervention over 2% of GDP, and having a trade surplus with the US over US $20 billion trade.

The flagging of Taiwan, Vietnam and Switzerland falls short of applying the manipulator label due to a 1988 law requiring evidence of manipulation to stop balance of payment adjustments or to gain a trade advantage. The US is already engaged in talks with Vietnam and Switzerland and will enter into “enhanced engagement” with Taiwan as well. Not being upgraded to the manipulator title relieves pressure from Switzerland and Vietnam, who both received the label in the last report issued by the Trump administration.

SOURCE: Yahoo Finance and Live Mint

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Thailand

Covid-19 brings surge in gold and cryptocurrency investment

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Covid-19 brings surge in gold and cryptocurrency investment | Thaiger
PHOTO: Gold and cryptocurrency are booming in pandemic times

In the uncertain times of the Covid-19 pandemic, investors are leaning towards safe investments like gold and also the emerging cryptocurrency market. Gold prices hit a 7 week high at over 55,000 baht on Thursday and around April 15 online gold transactions in Thailand doubled. One reason for the rise in gold price is uncertainty, with tensions growing between the US and Russia. Speculators believe gold may reach up to US $1800 during 2021 due mostly to more international tension between the US and China, and the US bond yields on the decline.

Online trading has seen a huge increase, as investors are closely monitoring gold prices, perhaps because they’re stuck at home and on the internet much more during the Covid-19 pandemic. New online accounts are growing as is the trading volume for online gold purchases.

Meanwhile, cryptocurrency has surged in investors and trading to an all-time high, again partially due to the coronavirus pandemic. Bitcoin reached a record price of over 2 million baht per coin this week. And many altcoins are gaining in popularity. The online trading platforms and exchanges for most crypto were not restricted by Covid-19 so the industry is swelling. Coinbase, the biggest cryptocurrency exchange in the United States went public on the NASDAQ stock market on April 14th. Last year’s total revenue for the popular exchange was US $1.2 billion, but the public offering reported earnings of $1.8 billion in the first quarter of 2021 alone.

While gold and cryptocurrency has become a popular way to make money during the pandemic, not all cryptos are created equal and most fail. Watchers have seen a 1 to 2% success rate out of the over 9,000 altcoins that have been created in the crypto boom. Advisors suggest cautious trading and investing in only the top few hundred altcoins.

With online gold trading and cryptocurrency surging ahead, the contrast is stark to brick and mortar industries decimated by Covid-19. Retail, tourism, and traditional banking have all taken massive hits. Kasikorn Bank dropped nearly 3% in the stock market. Only global oil, petrochemical, and electronics success have helped to bolster the Stock Exchange Thailand Index, with PTT Exploration and Production stock climbing over 4%. Covid-19 related industries such as rubber glove suppliers are flourishing with investors speculating on further growth if the third wave continues to spread. Overall though, the stock market rose half a per cent with the announcement that there will not be a Covid-19 lockdown just yet.

SOURCE: Bangkok Post

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Economy

China grows 18.3%, the only major economy to grow in 2020

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China grows 18.3%, the only major economy to grow in 2020 | Thaiger
PHOTO: China - the second largest economy, and only major economy to grow last year.

China’s economy set a record for growth in Q1, 2021, marking an 18.3% jump in year-on-year figures, the biggest quarterly growth in almost 30 years. China only started publishing growth statistics in 1992, and this drastic increase is the fastest growth recorded since then.

The figures, however impressive, are mainly due to what is called a “low base effect” where the change from a low starting point translates into big percentage statistics. Because of the devastating economic effects of the Covid-19 pandemic, the Q1 2020 figures were dismal, allowing the big gain over the last year.

Quarter to quarter, the last 3 months saw only a 0.6% growth, but in the last quarter of 2020 China recorded an economic boom of 6.5% according to the Chinese government. Still, the figures are admirable, as China was the only major economy in the world to achieve growth in 2020. Most of the planet struggled to contain global Covid-19 outbreaks, crippling economies across the globe. But China, now the second-largest economy in the world, managed a 2.3% overall expansion. Even Chinese officials called the impressive statistics “better than we had expected.”

China has been growing in terms of imports and exports as well, with exports expanding nearly 31% and imports up 38% by price over last years.

SOURCE: CNN

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