4Q08 Proves to be a Challenging Quarter for Indonesia's Mobile Phone Market, says IDC

Jakarta, 30 April, 2009 - Based on results from IDC's Asia/Pacific Quarterly Mobile Phone Tracker, 4Q 2008, Indonesia's mobile phone market declined considerably by 35% in unit shipments in the fourth quarter of 2008 (4Q08) compared to 3Q08. Overstocked inventory from the previous quarter and the impact of the global economic downturn, coupled with the volatile value of the Indonesian Rupiah against the US dollar, were the key reasons behind the negative market growth rate in 4Q08.

Despite the weak fourth quarter performance, 2008 is considered a good year for mobile devices in Indonesia with a 79% year-on-year growth. Traditional mobile phones, which makes up 95% of shipments, dropped sequentially by 36%, while converged device shipments weakened by 24%.

“Aggressive promotions and advertising campaigns by mobile operators and a price war between vendors made mobile phones more attractive and affordable during the year. However, IDC expects challenges seen in 4Q08 to continue in year 2009, as the uncertain economy will force Indonesians to be prudent with their spending. Vendors and distributors have been revising their targets for the year to fit these emerging market trends,” says Ashadi Cahyadi, Research Manager for Telecommunications Research at IDC Indonesia.

Nonetheless, one area that remains promising is the converged devices segment. "The converged devices segment is expected to benefit from the mobile operators' focus on non-voice revenues. Mobile Internet and data services related to social networking services are particularly promising areas, as more and more Indonesians, especially those living in big cities, start using their mobile phones to stay connected and up-to-date with their online communities such as Facebook, Friendster and MySpace," adds Ashadi.

Source: IDC's Asia/Pacific Quarterly Mobile Phone Tracker, 4Q 2008

ENDS

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IDC's Taxonomy

Mobile Phones – These small, battery-powered, voice-centric devices utilize operator-provided cellular/PCS air interfaces for voice communication. They are designed primarily, in both form factor and feature set, for a compelling mobile telephony experience, but may also include text-messaging capability. Mobile phones may include a headset jack for hands-free operation as well as a variety of features, such as personal information management, multimedia, games, or office applications. Mobile phones exist at all points along the form factor, price point, and feature set continua.

Converged Mobile Devices – A subset of mobile phones, converged mobile devices feature a high-level operating system that enable the device to run third-party applications in addition to voice telephony. Examples of high-level operating systems include Android, BlackBerry, Linux, Mac OS X, Palm, Symbian, and Windows Mobile. Converged mobile devices share many features with traditional mobile phones, including personal information management, multimedia, games, and office applications, but the presence of a high-level operating system differentiates these devices from all others.

Handheld Devices - These devices bring a wide range of mobile functionality to users. Either pen or keypad centric, these are designed to help users access and manage data. They may include wireless data capabilities to enable Internet access and text communication through WiFi but do not include cellular connectivity. Handheld devices with cellular connectivity are tracked within the converged mobile device category. Positioned to replace paper-based address books, day planners, and even laptops in some instances, these devices may also include an expanding list of features, such as multimedia, email, and mobile Internet. These devices feature evolved operating systems or application environments, such as the Palm OS, Windows Mobile, Linux, or other proprietary platforms with the ability to download, run applications, and store user data beyond their required PIM capabilities

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