Philippines is third-largest market for smartphones in SE Asia -- IDC

Posted on March 24, 2015

THE PHILIPPINES was Southeast Asia’s third biggest smartphone market in 2014, with 26.8 million shipped, pulling ahead of Vietnam, research firm International Data Corp. (IDC) said on Monday.

IDC said in a statement that smartphone shipments in the Philippines registered 76% growth year-on-year, fueled by budget offerings from local vendors.

While feature phones still made up majority of the market last year, IDC said the past months saw both local and international vendors increasingly shifting their focus toward smartphones. “Prices of smartphones continue to drop as component prices drop and original equipment manufacturers are able to produce cheaper smartphones,” the research firm said.

“The narrowing price gap between smartphones and feature phones made smartphones more palatable to budget-conscious Filipino consumers, leading to the faster adoption of smartphones in 2014 compared to previous years,” IDC Philippines Market Analyst Jerome M. Dominguez said in the statement.

Sub-P4,000 smartphone models accounted for more than 58% of smartphone shipments to the country last year, according to IDC.

“Catching up on the smartphone craze, the Philippines is now the third largest market for smartphones in Southeast Asia, coming after Indonesia and Thailand,” Mr. Dominguez said.

The Philippines, according to IDC, also became the fourth country in Southeast Asia to ship more smartphones than feature phones, after Singapore, Malaysia, and Thailand.

During the third quarter of 2014, the Philippine smartphone market for the first time surpassed those of feature phones, the research firm said.

Although most smartphone vendors grew in volume terms in 2014, local vendors managed to gain market share year-over-year, growing to 57% from 2013’s 49%.

Due to stronger competition from local and Chinese vendors last year, the share of global vendors also dropped to 28% from 35%.

IDC said that three local smartphone vendors made it to the top 5 in the Philippines last year in terms of unit shipments.

Cherry Mobile was the top smartphone vendor last year, while MyPhone and Torque ranked 3rd and 5th, respectively.

“The success of local smartphone players is an offshoot of heavy marketing, celebrity endorsements, and price-competitive offerings. Branding is critical in the Philippines,” Daniel Pang, senior research manager of the Client Devices Group at IDC Asia/Pacific, said.

Among the Chinese vendors, Lenovo has the biggest share in the Philippines, taking the 4th spot.

Although gaining traction in other regions, Chinese vendors that recently branched out of China, such as OPPO and Xiaomi, have yet to gain ground in the Philippines given limited brand awareness, IDC said.

“Samsung still leads the pack of global vendors, followed by LG Electronics,” IDC report showed.

As a newcomer to the smartphone market, ASUS also gained considerable share last year. The decline of Sony and Blackberry, according to IDC, contributed to the drop in the overall share of global vendors in the Philippine smartphone market.

IDC said it remains bullish about the Philippine smartphone market in 2015.

“Smartphone shipment is expected to grow 20% year-over-year. Feature phone shipments, on the other hand, are expected to decelerate by 20% this year as more vendors shift their focus to making smartphones,” it said. -- Chrisee Jalyssa V. Dela Paz