Last month, Chinese smartphone and computer maker Lenovo inaugurated its new smartphone factory in Serang (West Java), attracted by Indonesia's cheap labor costs. This plant, Lenovo's only plant outside China, has a production capacity of between 75,000 and 150,000 smartphones per month. The first smartphones to be manufactured at this plant are the Lenovo A6010 and A2010. Currently, Lenovo ranks first in the 4G-LTE category in Indonesia with a 19.2 percent market share.

Lenovo's plant in Serang will also comply with the new government regulation stipulating that 4G smartphone manufacturers in Indonesia are required to use at least 30 percent of local content in domestically-sold smartphones and at least 40 percent for base transceiver stations (BTS), starting from January 2017.

Indonesia offers a new and attractive market for 4G technology (whereas 4G markets in the USA, China and Japan are already saturated). It is estimated that only around 30 percent of the population owns a smartphone, implying that smartphone penetration is still low. However, due to robust economic growth and the young (and large) population, demand for smartphones is expected to accelerate sharply in the years ahead. eMarketer expects Indonesia to have the world’s fourth-largest smartphone user population by 2018 with more than 100 million active monthly users.

Smartphone Growth Indonesia:

   2013  2014  2015  2016  2017
Smartphone Users
(in million)
   27    38    52    69    87

Source: Nielsen