Philippine smartphone shipments fall 7% in 2017

by Patrizia Paola C. Marcelo, Businessworld, Apr 8, 2018

PHILIPPINE smartphone shipments declined by 7% to about 15 million units in 2017, the International Data Corp. (IDC) said.

The market intelligence firm said that smartphone shipments declined for the first time since their introduction due to “intense competition” from top brands, such as Samsung, Oppo, and Vivo, which resulted in some vendors exiting the market.

IDC added that the average selling price of smartphones in the Philippines rose 13% year on year to $134, though Philippines remained among the most price-sensitive markets in Asia-Pacific.

“A clear trend has recently emerged in the Philippine smartphone market where end-users are shifting to handsets with higher specs and better features,” IDC said.

However, ultra low-end smartphones (selling for less than $100) still led in terms of market share, accounting for 59% of smartphones in 2017 (against 67% in 2016).

Meanwhile, the combined share of low-end (selling for between $100 and $200) and midrange (between $200 and$400) smartphones grew to 35% in 2017 from 28% in 2016.

IDC said that Samsung, as well as Chinese brands such as Oppo and Vivo which were strong in their marketing campaigns, were the key brands that led to the rise of the low-end and midrange segments in 2017.

“Heavy marketing campaigns and lucrative sales promoter incentives enabled these brands to strengthen their mindshare in the local market, increase their shipments, and grow their respective market shares. The assault of these brands affected the sales of some of the players, resulting in them reducing their supplies, which ultimately impacted overall smartphone shipments,” Jensen Ooi, Senior Market Analyst, Client Devices, IDC ASEAN, said in a statement.

4G smartphones gained traction with a 54% share, while Android market share in the Philippines was estimated at 97%.

In terms of brands, Cherry Mobile led with a 21% share; other brands combined for 42% of the market, with Samsung taking up 12%; MyPhone 11%; Oppo 8%; and Asus 5%.

IDC said that phablets or “phone tablets” with a screen size of between 5.5 and 7 inches recorded significant growth in recent years, accounting for about a quarter of smartphone shipments in 2017. “As mobile content continues to grow, smartphones have become the primary device for basic productivity and everyday media consumption, and this fuels the need for larger screens and higher specs,” Mr. Ooi added.

In the personal computer (PC) market, IDC said that the Philippines is “among the few remaining bright spots” for traditional PCs in the Asia-Pacific.

“Over the past five years, the Philippine PC market has been growing at a compound annual growth rate (CAGR) of 3%, while its ASEAN neighbors have been declining at CAGRs of around -3% to -12%,” IDC said.

This could be primarily driven by the country’s slow technology adoption, but in the recent years, the mobile working trend and large millennial Filipino population are also driving traditional PC adoption to higher levels.

PCs are still popular in the Philippines despite the rise of smartphones, for users with heavy workloads and higher-level entertainment needs.

“Despite smartphones having drawn away a portion of consumer demand in recent years, desktop and notebook PCs remain viable personal computing devices, especially for heavy workloads and higher-level entertainment,” said Sean Paul Agapito, Associate Market Analyst, Client Devices, IDC Philippines, said in a statement.

Laptops have overtaken desktops, with the latter being used for commercial and gaming purposes.

IDC said competition for smartphones will strengthen next year, with popular brands trying to cement their status and local brands struggling.

“We expect smartphone vendors to continue shipping in more phablets and equipping their new models with enticing features, such as dual cameras, thin bezels, and on-device artificial intelligence,” Mr. Ooi said.

The Philippine PC market is expected to grow in the coming years with the popularity of PC gaming and esports, the rise of telecommuting, and shift toward digital learning/education.

“As the Philippine economy matures, Internet services and coverage improve, and more Filipinos realize the potential of the Internet beyond social interaction – such as for education, work, and business among others – demand for PCs in the country is expected to grow even further,” Mr. Agapito said. —