Southeast Asia Smartphone Shipments Sink To Lowest Quarterly Level In Over A Decade

Southeast Asia’s smartphone market has contracted sharply, with quarterly shipments falling to their lowest point since 2014 as rising device prices push entry-level buyers out of the market.

Research from technology advisory firm, Omdia, shows that shipments across the region dropped 23 per cent year-on-year in the second quarter of 2026, totalling 19.3 million units.

Despite the fall in volume, market value held up comparatively well, reaching US$6.6 billion as average selling prices (ASPs) climbed 31 per cent year-on-year to US$342.

The decline has been driven largely by the collapse of the sub-US$100 segment, which has historically underpinned much of Southeast Asia’s smartphone demand. Vendors across the board have raised prices on both new and existing models, effectively pricing out a large portion of the entry-level market.

Entry-Level Pricing Shift Ripples Across The Market

Omdia Senior Analyst, Sheng Win Chow, attributed the market contraction to a cascading effect across price bands.

“Much of the entry-level volume has been absorbed into the higher price bands in a domino effect,” Chow explained.

“When one model is repriced, vendors often need to reposition other devices within their portfolios to avoid cannibalization. However, shipments above $100 still declined 2 per cent overall, showing that the higher price bands have not absorbed all of the displaced volume. Much of that volume has left the market altogether rather than moving upwards.”

The US$100-US$199 segment has absorbed the largest share of remaining entry-level demand, increasing from 32 per cent to 39 per cent of total shipments. Much of this resilience came from devices that would previously have competed below US$100 being repriced into the higher band.

Reduced discounting has also contributed to the shift between price bands. Historically, much of Southeast Asia’s sub-US$100 volume came from heavy discounts on models originally launched at higher prices. That pattern reversed in the second quarter, as vendors not only introduced new models at higher prices but also raised prices on existing devices after launch.

Samsung Gains Share Despite Price Increases

Among the top five vendors, Samsung posted the smallest decline in shipments at 11 per cent year-on-year, shipping 3.9 million units and lifting its market share from 17 per cent to 20 per cent.

The South Korean vendor raised prices on the Galaxy A07 and A17 after launch, reversing the typical pattern of post-launch price declines. The strategy helped lift Samsung’s share of the US$200-US$299 segment from 18 per cent in the second quarter of 2025 to 32 per cent in the same period this year.

Samsung also gained share across the wider sub-US$300 market, where competitors were reducing their exposure.

Xiaomi Records Sharp ASP Increase

Xiaomi posted the second-largest ASP increase among the top five vendors at 43.5 per cent, while its shipments declined 21 per cent to 3.7 million units.

The increase reflected both post-launch price rises for existing models, including the Redmi Note 15, and higher launch prices for new devices such as the 17T and Redmi A7 Pro compared with their predecessors.

Xiaomi’s sub-US$100 shipments fell 69 per cent, while shipments in the US$100-US$199 segment grew 55 per cent, indicating a clear migration of its customer base into higher price tiers.

TRANSSION And OPPO Face Contrasting Pressures

TRANSSION remained the vendor with the greatest exposure to the entry-level market. Its sub-US$100 shipments declined 47 per cent in the second quarter, while shipments priced at US$100-US$199 grew 12 per cent, making this the group’s largest price band.

New models including the Infinix Hot 70 and Tecno Spark 50 4G were launched at prices well above the devices they replaced.

OPPO recorded the sharpest overall shipment decline among the top five, with total volume falling 41 per cent to 3.1 million units. The vendor almost entirely exited the sub-US$100 price band, with shipments in that segment falling 96 per cent.

The lost volume was not offset at the next tier, where shipments of US$100-US$199 devices also declined 25 per cent.

vivo Shifts Entry-Level Above US$100

vivo moved its entry-level model above US$100 in most markets across the region. Its sub-US$100 shipments fell 88 per cent and accounted for just 5 per cent of its total volume, compared with 32 per cent a year earlier.

The vendor shipped 2.0 million units in the quarter, a decline of 26 per cent year-on-year, while maintaining its 11 per cent market share.

Full-Year Outlook Points To Continued Weakness

The region’s smartphone market is expected to contract further over the remainder of 2026. Omdia is forecasting a full-year decline of 25 per cent, with shipments projected to fall to 75.3 million units.

Research Manager at Omdia, Le Xuan Chiew, warned the weakness seen in the first half of the year is expected to persist.

“Southeast Asia is heading for its steepest annual contraction in at least seven years,” Chiew observed.

“The weakness seen in the first half of the year is expected to continue into the second half, as rising device prices weigh further on shipment volumes. Markets with greater exposure to entry-level devices and open-market retail channels, such as Indonesia and the Philippines, are expected to experience larger declines.”

Memory Costs To Add Further Pressure

Chiew also flagged rising memory costs as a looming concern for vendors in the second half of the year.

Devices shipped in the first half of 2026 reflect memory costs based on a blended average of earlier purchases rather than current market prices. This means current margins do not yet reflect the full increase in memory costs.

“As lower-cost inventory is depleted, vendors will face the full impact of today’s higher memory prices,” Chiew added.

The combination of higher component costs and weakening consumer demand in price-sensitive markets suggests vendors will face difficult trade-offs between maintaining margins and defending market share through the remainder of the year.

Omdia’s figures include sub-brand POCO within Xiaomi’s estimates, and realme within OPPO’s totals, while excluding OnePlus from OPPO’s numbers. The data is based on sell-in shipments tracked through the firm’s Smartphone Horizon Service.

Last Updated on August 27, 2026 by Nick Ross