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Phablet set to go mainstream next year

The phablet will become a mainstream mobile device next year, with 6.4 million units expected to be sold, while information technology spending will reach US$21.5 billion (Bt688.86 billion), according to IDC.

Phablets are smartphones with a screen size ranging from 5 inches to just below 7 inches. Frost and Sullivan predicts smartphone users next year will number more than 20 million, or 38 per cent of the mobile user base.

Michael Araneta, head of operations for IDC Research Thailand, said last week phablets will be popular next year due to the slowdown in prices, pricing of Bt6,000 per unit on average, the increase in demand, improved readiness of networks as well as better technology. This year phablets were priced from Bt5,500-Bt20,000 with the average at Bt12,000.

Phablets will account for half of the 12.8 million-unit mobile phone market next year. Desktop and notebook PCs will evenly split the 3 million-unit IT hardware market this year, but next year notebooks will take 55 per cent and desktop PCs 45 per cent of the market. The main customers are government agencies.

"The notebook and PC market will shrink next year and phablet devices are the fastest growing in Thailand, at 27 per cent this year," he said.

The country's spending on IT is expected to increase 7.2 per cent to $21.5 billion next year from $20.1 billion this year. However, the IDC will revise its IT spending forecast again early next year around February.

IT spending declined this year due to the political situation, rising household debt, low consumer and corporate confidence and emergence of disruptive technologies that changed the IT strategies of Thai companies.

"The political tension is definitely one factor, as several decision-makers are taking a wait-and-see approach for how ongoing issues will be resolved. The market is also seeing the holding back of government-backed schemes such as the One Tablet Per Child, Free Wi-Fi and Smart Cities.

"The high growth in mobile financial transactions will bring Thailand closer to a digital economy. There will still be strong spending from several sectors that are working on a clear business-as-usual mode such as manufacturing, financial services, telecoms and logistics," Araneta said.

The four innovative industry solutions that will attack the market next year are cloud computing, mobility, big data and social business.

Local enterprises will start to leverage the emergence of the choose-your-own-device business model, allowing employees to select from a small pool of approved company-issued devices.

IDC predicts five provinces will show growth in IT spending of at least 15 per cent. Chiang Mai, Nakhon Si Thammarat, Chon Buri, Khon Kaen and Udon Thani have high potential in education, manufacturing, small and medium business and real estate.

The provinces will make Bangkok less of a centre for ICT spending.

"Chiang Mai is strong in tourism and education, Khon Kaen in real estate, manufacturing and [small business] and Chon Buri in distributing IT products via IT malls and the modern trade," he said.

Marc Einstein, industry principal for digital media and telecoms at Frost and Sullivan said next year operators will benefit from increased smart device usage. The country currently has 15.3 million smartphone users or 25 per cent of its mobile user base.

Tablets will also continue to grow quickly from 4 million users or about 6 per cent of the population to 7 million users next year. "Tablets will grow strongly as users continue to buy tablets instead of PCs, and game developers should emphasise tablet-based gaming as tablet users spend considerably more on tablet games than smartphone games," he said.

Android will remain the dominant mobile operating system next year, rising from 70 per cent of smart device owners presently to 78 per cent.

Line will continue to be a major disruptive force. After its launch in the first quarter of last year, it is has grown to over 18 million users and is even catching up with Facebook, which now has over 25 million users.

"The Thai mobile gaming market is dominated by Line games such as Pokopang and Line Pop, and casino games also remain popular. Most foreign companies do not localise their content into Thai script, creating an opportunity for those that do. Thailand also has the potential to become a major hub for game production, and the government should do more to encourage foreign investment in the sector. However, games will be the fastest growing while console sales will be stagnant," he said.

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