Investment Opportunities in Asia Pacific's Tech Sector
Idea Generation for the Mid/Small Cap APAC Tech Sector. Including a Sector-Wide Overview, and Subject Specific Analysis and Stocks Identification.
APAC Tech
Overview of APAC's Tech Sector
We will look at key trends in streaming media, smart devices, interactive gaming, and artificial intelligence, leveraging recent industry data and forecasts. Initial industry analyses indicate strong growth in areas like smart TVs and generative AI, but also highlight challenges such as the decline in dedicated streaming media devices and the complication of AI implementation.
The overall video market in APAC is projected to expand from $145 billion in 2024 to over $165 billion by 2029, with online video being the main driver of this growth. The decline in streaming media devices (SMDs), with a forecast negative 7.0% compound annual growth rate (CAGR) through 2029, is not an isolated event but a direct consequence of the simultaneous boom in smart TV shipments, which saw a 9% year-over-year jump in Q1 2025. As smart TV penetration rises and their functionalities expand to natively include streaming applications, the distinct utility of separate SMDs diminishes. Consequently, smart TVs are becoming the main user of streamed content in households, giving investment opportunities towards companies within the smart TV ecosystem.
The APAC region's diverse economy and specific market needs create good opportunities for small to medium-sized enterprises (SMEs). The focus on this segment looks at market niches and companies that may be undervalued or overlooked by broader market analysis.
Streaming Changes in APAC
Market Size and Growth Direction
The APAC video market is projected to grow from $145 billion in 2024 to over $165 billion by 2029. This $20 billion net increase is primarily fueled by a massive $24.1 billion increase in online video revenues. Conversely, traditional TV is expected to see its revenues shrink by $8 billion over the same period.
"By 2027, streaming will outpace traditional TV, driven by powerhouse markets like China and India. Its share of video revenue jumps from 44% in 2024 to 54% by 2029".
Growth Drivers and Segments
Subscription Video on Demand (SVOD): The SVOD segment continues its upward trajectory, with subscriptions anticipated to rise from 644 million in 2024 to 870 million by 2029. This growth translates to an $8.4 billion increase in revenue. Six key markets - India, China, Japan, Australia, Korea, and Indonesia - are pivotal, collectively accounting for approximately 90% of the projected revenue growth in the APAC video sector over the next five years.
Advertising-Supported Video on Demand (AVOD) and FAST Channels: Premium AVOD is a significant growth area, forecast to add $5 billion in revenue, with particularly strong uptake in markets like India and Australia. This aligns with Kagan's estimate of a $2.3 billion opportunity for ad-supported paid streaming (a hybrid model) in East Asia and India, which had already reached nearly 260 million subscriptions by the end of 2024. The broader APAC Free Ad-Supported Streaming TV (FAST) market is on an even more aggressive growth path, projected to expand from $2.14 billion in 2023 to $10.21 billion by 2030, representing a compound annual growth rate (CAGR) of 25%. Linear Channel is identified as the fastest-growing segment within FAST. Cloud technology company Amagi reported that FAST consumption in APAC saw "triple-digit increases in viewing hours and ad impressions" in 2024, outpacing global trends. This rapid adoption is a strong indicator of consumer willingness to engage with ad-supported models. Samsung TV Plus exemplifies this trend, reporting 88 million monthly active users (MAU) globally in 2024 and over 50% year-over-year viewership growth. The service is actively expanding its footprint across APAC, including Australia, India, New Zealand, the Philippines, Singapore, and Thailand.
User-Generated Content (UGC)/Social Video: This segment is leading overall online video growth with a projected $10.7 billion revenue boost by 2029, significantly influenced by AI-driven innovations in content creation and discovery. This highlights the immense popularity and monetization potential of platforms like YouTube, TikTok, and their regional counterparts.
The projection that advertising will drive 65% of online video growth and constitute 54% of total video revenue by 2029 signifies a change in monetization strategies. Aside from SVOD tiers, this reflects the explosion of FAST channels and the continued strength of UGC platforms. Consumers are demonstrating a high tolerance for ad-supported content in exchange for free or lower-cost access, particularly in the price-sensitive markets prevalent across APAC. This trend fuels a rapidly growing market for ad inventory, consequently driving demand for ad-tech solutions that are tailored to APAC's mobile-first culture.
Advertising
Advertising is becoming the financial backbone of the APAC online video industry. It is expected to drive 65% of online video growth and will represent 54% of total video revenue by 2029. The ascent of premium AVOD models, particularly outside of China where regulation and consumer preferences differ, is described as a "game-changer" for the industry.
The Rise of Local Players and Content
While global streaming services such as YouTube and Netflix maintain a strong presence, a notable trend is the increasing traction of local and regional platforms. These players are gaining market share in key territories including India, Indonesia, Japan, and Korea. Examples include Singapore's meWATCH , China's iQIYI (NASDAQ: IQ) , India's Hotstar , and Southeast Asia's Viu (a PCCW subsidiary). Their success often hinges on an understanding of specific cultural preferences. This shows that understanding and catering to local tastes is becoming a critical success factor. Local players can often acquire or produce this content more effectively or build stronger relationships with local talent and production houses.
Streaming Media Devices (SMDs) in Decline
Streaming Media Devices (SMDs) are facing a decline. Kagan forecasts SMD shipments to decline at a negative 7.0% CAGR through 2029, stating,
"The SMD market may have had an opportunity to address new use cases, but we believe that moment has all but passed."
This decline is directly linked to the rise of smart TVs with integrated streaming capabilities.
Small/Mid-Cap Considerations
Ad-tech companies specializing in targeted advertising, dynamic ad insertion for FAST/AVOD, or fraud prevention in mobile-first APAC markets are well-positioned. Providers of enabling technologies for streaming, such as edge cloud platforms and content delivery networks, like Fastly Inc. (FSLY), a US-based mid-cap with APAC operations , also stand to benefit. Intellectual property service firms such as IPH Ltd (ASX: IPH), which operates in several APAC countries, could benefit from increased content creation and distribution. Network as a Service (NaaS) providers like Megaport (ASX: MP1) facilitate the connectivity essential for high-quality streaming. While many prominent local streaming services are parts of larger conglomerates (e.g., Viu and PCCW (HKG:0008); iQIYI), their extensive supply chains for content acquisition, production, and technology might involve smaller, specialized entities. For small/mid-cap content creators or niche platform operators, competing with Netflix or YouTube on budget is unfeasible. However, achieving deep market penetration through highly localized and culturally attuned offerings presents a viable competitive strategy. This also creates opportunities for companies providing localization services such as dubbing, subtitling, and cultural adaptation.
Smart TV: Connected Entertainment in APAC
Market Growth and Regional Dominance
The global smart TV market is experiencing high growth, with shipments up 9% year-over-year in Q1 2025, marking the fourth consecutive quarter of expansion. This growth is attributed to "improving macroeconomics," "front-loaded shipments ahead of tariffs," and "government-backed trade-in subsidies." The Asia-Pacific connected TV (CTV) market, a subset of the broader smart TV market, is forecast to see its revenue climb from $103.3 million in 2024 to $222.5 million by 2030, achieving a CAGR of 14.4%. India is highlighted as the country expected to register the highest CAGR within this segment.
APAC already accounted for 38.7% of the global CTV market revenue in 2024 and is projected to become the leading regional market globally in terms of revenue by 2030. Looking at the entire television market in APAC, it is projected to grow at a CAGR of 4.70% between 2025 and 2034. The region accounts for nearly 34% of global smart TV sales by shipment volume and demonstrates the fastest growth in unit shipments. The strong growth in smart TV shipments and the decline of dedicated streaming media devices indicates that the smart TV is consolidating its position as the primary interface for home entertainment. This will create opportunities for component suppliers and software developers focused on enriching the smart TV experience.
Key Drivers
The primary drivers include increasing consumer demand for high-definition content and the advanced features offered by smart TVs. Rising disposable incomes, particularly in rapidly developing markets such as India and China, are enabling more consumers to invest in premium television sets. The seamless integration of streaming services and compatibility with smart home ecosystems are also major attractions for consumers, with over 72% globally now preferring smart TVs over traditional models.
Smart TV SoC (System-on-a-Chip) Market
The market for Smart TV SoC chips is witnessing strong growth, directly correlated with smart TV sales. The APAC region is expected to dominate this market due to its large consumer base and high demand for electronics. China, India, and South Korea are key growth engines. While major players like MediaTek, Samsung, and Hisense have significant market share, there is also a presence of smaller, specialized players such as Amlogic (SSE: 688099). Financial reports for Amlogic indicate revenues of $5,926.32 million for the year ending December 31, 2024.
Supply Chain Challenges and Considerations
The smart TV market is not without its headwinds.
"Nearly 46% of manufacturers reported increased component costs, particularly for display panels and semiconductor chips. Around 39% of suppliers experienced shipment delays," leading to constrained inventory and extended lead times. Specifically within Asia-Pacific, "41% of OEMs cited logistics disruptions as a critical issue, impacting production timelines and cost structures".
Price sensitivity in emerging markets also presents a challenge, with approximately 48% of potential buyers in developing countries delaying purchases due to cost concerns.
Small/Mid-Cap Considerations
Opportunities exist for manufacturers of components catering to high-growth smart TV segments, such as very large screens; "Above 70 inches is the most lucrative screen size segment registering the fastest growth". Specialized SoC designers or IP providers focusing on niche functionalities for smart TVs, like Amlogic (SSE: 688099), represent potential avenues. Companies developing smart TV operating systems or applications tailored for specific APAC markets and languages could also find traction. Given the supply chain disruptions, firms offering innovative logistics or supply chain management solutions for the electronics sector in APAC could find demand. While a large-cap, Foxconn (TWSE: 2317) and its extensive network of suppliers (which may include SMEs) are indicative of the broader health and activity within the electronics manufacturing ecosystem that supports smart TV production.
Video Game Industry in APAC
Market Overview and Growth
Global video game software and services revenue grew 2.4% year-over-year to $52.81 billion in the first quarter of 2025, signaling a gradual recovery from the industry's post-pandemic adjustments. However, the longer-term outlook is more obscure. While major releases like Grand Theft Auto 6 and the Nintendo Switch 2 are expected to provide a clear path to growth over the next 18 months, rising development costs and slowing mobile device adoption inform expectations of a slight overall market contraction over the next five years.
Mobile Gaming Dominance and Trends in Southeast Asia (SEA)
Southeast Asia has emerged as an important growth region in the global mobile gaming industry. In Q1 2025, SEA ranked as the second-largest global market for mobile game downloads, with 1.93 billion new installs, a 3% increase from the previous quarter. While the region ranked seventh globally in in-app purchase (IAP) revenue at $625 million in Q1 2025, this figure indicates significant untapped monetization potential, supported by a large gaming community, improving digital payment infrastructure, and rising smartphone adoption.
Within SEA, Indonesia led in mobile game downloads in Q1 2025, reaching 870 million (a 9% increase QoQ), followed by the Philippines (366 million) and Vietnam (329 million). Thailand was the top revenue generator in the region, with $162 million in IAP revenue during Q1 2025, attributed to its strong digital payment systems and a cultural willingness to spend on in-app purchases.
Accessible genres like Arcade and Simulation games drive high download volumes due to their ease of play. However, IAP revenue is primarily dominated by more immersive genres such as Strategy (especially 4X and MOBA), Shooters, and RPGs. Publishers from SEA, particularly from Singapore and Vietnam, demonstrated major global impact in Q1 2025. Garena Free Fire (Singapore) topped global downloads, and Vietnamese publishers notably led global download growth with viral survival-themed hits. Hyper-localization, involving culturally relevant content and community building, is a key success factor, exemplified by titles like Mobile Legends: Bang Bang.
Broader APAC iGaming Boom
The broader APAC iGaming sector is forecasted to generate revenues surpassing $94 billion by 2027. This growth is fueled by increasing smartphone penetration, high-speed internet, and a flourishing mobile gaming scene. Key market segments include live casinos, with popular games like roulette and blackjack in the Philippines and India, and localized games such as Sic Bo in China and Pachinko in Japan. Sports betting is the fastest-growing segment, particularly driven by cricket in India and horse racing in Japan, Australia, and Hong Kong.
Technological advancements, including improved video delivery via CDNs and increasing 5G penetration, are significant growth drivers. Mobile technology is central to this boom; the APAC region is expected to surpass 2.8 billion smartphone users in 2025, making it the largest mobile market globally. Experts project that by 2024, mobile channels will contribute 75% of online revenue for iGaming operators in the region.
Small/Mid-Cap Considerations
Mobile game developers specializing in genres popular in SEA or possessing strong localization capabilities are well-positioned. Several Korean game developers are listed, including Com2uS Holdings (KQ:063080) , Webzen (KQ:069080) , and Gravity Co. (NASDAQ:GRVY). Com2uS Holdings reported Q1 2025 consolidated revenue of KRW 24.3 billion. Webzen's Q3 2024 consolidated operating revenues were KRW 49.16 billion. Gravity Co. reported Q1 2025 total revenues of KRW 137.5 billion.
Other potential areas for SMEs include companies providing payment solutions for iGaming, esports event organizers, and related service providers. On the Australian Securities Exchange (ASX), small-cap entertainment and gaming companies include PlaySide Studios Limited (ASX:PLY), iCandy Interactive Limited (ASX:ICI), Sportshero Limited (ASX:SHO), StreamPlay Studio Limited (ASX:SP8), Mighty Kingdom Limited (ASX:MKL), and Kneomedia Limited (ASX:KNM). Investors should note the inherent volatility and specific market conditions affecting such smaller entities.
The Rise of Generative AI in APAC Enterprises
Market Growth Projections
The generative AI (GenAI) market is set for substantial expansion, with 451 Research projecting a 39.8% CAGR from 2024 to 2029. Despite the rapid advances in GenAI garnering significant attention, the translation of these breakthroughs into widespread commercial opportunities is less clear. This is partly due to a gap between innovation and product readiness, as well as uncertainty surrounding long-term enterprise investment strategies.
Enterprise Adoption Trends
Asia-Pacific is rapidly embracing GenAI, now ranking second only to North America in adoption rates. The perceived value of generative technologies in APAC is notably higher than in Europe and trails North America by a narrow margin. Leading the charge, China and India are leveraging GenAI to modernize various sectors and cultivate talent. Within the tech industry in APAC, over 80% of organizations have adopted GenAI, integrating it into core offerings such as cloud application services and data centers.
A significant indicator of future growth is that over 90% of companies in the region plan to scale up their GenAI initiatives over the next two years, with more than half intending to collaborate with partners to enhance their AI capabilities. Deloitte's research shows that younger employees and students are key drivers of GenAI adoption across Asia Pacific, often utilizing these tools without explicit managerial awareness. Developing economies in the region are outpacing developed ones in GenAI adoption by approximately 30%. The productivity gains are substantial, with GenAI saving users nearly a day per week on average; in Southeast Asia, this translates to about 6.0 hours at work and 5.3 hours at university per daily user. Despite these benefits and user enthusiasm, a perception gap exists, as nearly three-quarters of businesses are considered by their own employees to be lagging in GenAI adoption.
Success Factors and Leadership
Successfully scaling AI involves a proven playbook, as identified by BCG. This includes championing GenAI at the CEO level, aligning it with overarching business objectives, investing significantly in partnerships and employee upskilling, and integrating AI into core business functions. Prioritizing impactful use cases and tracking clear key performance indicators (KPIs) are also crucial. The prominence of AI was evident at Computex Taipei 2025, where it was "undoubtedly front and center," with major tech players actively riding the AI wave. NVIDIA's sustained AI rally, driven by innovations like its Blackwell architecture, further underscores the critical role of advanced hardware in powering the GenAI revolution, despite challenges like trade restrictions impacting profitability on certain products like the H20 chip.
Small/Mid-Cap Considerations
The growing GenAI field offers numerous opportunities for specialized small to mid-cap companies. These include AI solution providers catering to specific industries (e.g., fintech, healthcare, manufacturing) or particular functions, such as the rapid transformation of enterprise workflows by AI in code generation. The "significant challenges in implementing generative AI projects," as noted by 451 Research, also create a demand for consultancies and service providers specializing in GenAI project management, integration, and upskilling. Data annotation and high-quality data engineering services are fundamental for training advanced language models; Innodata Inc. (NASDAQ:INOD), a US mid-cap, is an example of a company providing such services and has launched a Generative AI Test & Evaluation Platform.
Within APAC, several publicly listed small to mid-cap AI software companies are noteworthy: In India, companies like Happiest Minds Technologies (NSE:HAPPSTMNDS), RateGain Travel Technologies (NSE:RATEGAIN), Saksoft (NSE:SAKSOFT), Kellton Tech Solutions (NSE:KELLTONTEC), Affle India (NSE:AFFLE), Zensar Technologies (NSE:ZENSARTECH), and Persistent Systems (NSE:PERSISTENT) are active in the AI space. On the Tokyo Stock Exchange, AI inside Inc. (TYO:4488) , Headwaters Co. Ltd. (TYO:4011) , and Appier Group Inc. (TYO:4180) are among the players. AI inside Inc. reported revenue of $27.69 million for the year ending March 31, 2024. Headwaters Co. Ltd. focuses on planning and developing AI applications. Appier Group Inc. provides an AI platform for marketing and sales.
Connectivity and Infrastructure: eSIMs and Broadband
eSIM Market Growth
The adoption of eSIM technology is accelerating globally, with significant implications for connectivity in the APAC region. The global travel eSIM market alone is projected for a compound annual growth rate (CAGR) of 21.03%, anticipated to expand from $5.45 billion in 2024 to $25.1 billion by 2032. Key drivers for this surge include the increasing integration of eSIM technology in mobile devices (smartphones, tablets, wearables), the growing demand for seamless international connectivity, and the appeal of cost-effective mobile data solutions for travelers.
Asia-Pacific is identified as the fastest-growing region for travel eSIMs, with countries like China, India, and Japan at the forefront due to high mobile device adoption and rising international travel. Beyond travel, the broader APAC eSIM market is expected to achieve a CAGR of 5.56%, reaching a projected value of $2.09 billion by 2034. While Machine-to-Machine (M2M) applications, driven by the Internet of Things (IoT) across industrial verticals like consumer electronics and automotive, are anticipated to dominate the market, the smartphones and tablets segment is expected to exhibit the fastest growth rate. This is partly due to major manufacturers like Apple and Google releasing smartphones with embedded SIM capabilities. Mobile Virtual Network Operators (MVNOs) are actively leveraging eSIMs to offer seamless roaming and are targeting new customer segments, including fintech companies, sports teams, influencers, and global employers.
Broadband and Pay TV
Discussions at ATxEnterprise 2025 in Singapore emphasized evolving content consumption patterns, the transformation of media and connectivity across Asia, and the persistent challenges posed by piracy in the digital age. A notable trend is the rapid expansion of connected TVs and fixed broadband infrastructure, which is enhancing big-screen viewing experiences and creating new monetization opportunities across the region.
Small/Mid-Cap Considerations
The growth in eSIMs and evolving broadband infrastructure presents several avenues for small to mid-cap companies. MVNOs or eSIM platform providers that focus on niche travel segments or develop specialized enterprise solutions for the APAC market could find substantial growth. For instance, Ubigi, backed by the telecom giant NTT (TYO:9432), is making inroads in the global eSIM market, including APAC. While many direct-to-consumer eSIM providers like Airalo, Saily, and Holafly are private or part of larger entities , the enabling technology and platform services they rely on could involve smaller listed companies.
Companies involved in the deployment or maintenance of fixed broadband infrastructure, particularly in underserved regions of APAC, also stand to benefit from the connectivity surge. Furthermore, the ongoing issue of piracy creates a demand for cybersecurity firms specializing in anti-piracy solutions tailored for the APAC media market.
Conclusion and Outlook
Small/Mid-Cap Opportunities and Challenges
For small to mid-cap companies, this environment presents both opportunities and challenges. While the overall growth trends are positive, SMEs is faced with intense competition, the need for continuous innovation, and the issue of scaling operations. Opportunities lie in specialization, particularly in developing localized content and services for diverse APAC markets, providing enabling technologies for larger players, or carving out niches in areas like ad-tech, specialized AI solutions, and eSIM services. However, these companies often face greater hurdles in accessing capital and managing supply chain risks compared to their larger counterparts.
Final Thoughts on the APAC Tech Trajectory
The Asia-Pacific region will undoubtedly remain a critical growth engine for global technology. The trajectory, however, will be shaped by a confluence of factors: the pace of technological innovation, particularly in AI and connectivity; the evolving preferences and purchasing power of APAC consumers; the development of regulatory frameworks governing data, content, and competition. Investors focused on the APAC tech sector, particularly in the small to mid-cap space, require a understanding of these perspectives to identify sustainable growth opportunities and mitigate potential risks.
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