COMPETITION in the smartphone-manufacturing industry—which resulted in the rollout of more decent-quality phones with longer life cycles—has pulled down demand for smartphones in the Philippines by 7 percent in 2017.
Demand is expected to recover slightly in 2018, however, as more and more Filipinos rely on their mobile phones for basic necessities.
International Data Corp. Senior Analyst and Asean Devices Research Team Lead Jensen Ooi said shipments of smartphones to the Philippines in 2017 reached only 15.4 million, a 7-percent drop from the 16.6 million units shipped in 2016.
“The decline was due to significantly reduced shipments from several local vendors and some smaller ones, as well as a result from increased competition and marketing activities from Samsung, Oppo and Vivo,” he told the BusinessMirror.
The Philippines and Myanmar were the two outliers in the “emerging Asean” market that was studied by the think tank in 2017. The decline in smartphone shipments in both countries affected the economic bloc’s numbers, resulting in a 1-percent decline in total smartphone shipments to only 100 million in 2017.
“Apart from the growing popularity of the top 4 players that have been able to hold up shipment volumes, [the] majority of end users are in no rush to acquire a new handset if they have been using midrange ones, as the handsets are of decent quality and priced considerably high for this budget-conscious region, resulting in longer life cycles and replacement rates,” Ooi said.
Midrange phones, Ooi explained, are mobile phones that come with features and specs similar to smartphones and are offered at a lower price. They also have better quality than feature phones.
Top vendors in the market are Samsung with a share of 29.3 percent, Oppo with 17.2 percent, Vivo with 7.2 percent and Huawei with a share of 5.4 percent.
“These top vendors supply the market with midrange phones that have better quality, hence, they last longer. They also come with better features and specs. So, because they are of better quality and they cost considerably expensive for the average consumer, demand has lowered because end users no longer need to replace their phones as frequently as before,” Ooi explained.
In the Association of Southeast Asian Nations region, demand for midrange handsets grew rapidly in 2017, with handsets now making up 27.1 million units of the total market versus the 17.6 million units in 2016, according to the think tank’s report.
Aside from this, 4G phones now make up 81 percent of the total market with 81.1 million units in 2017, quite a leap from the 56.2 million handsets the year prior.
“In 2018 local vendors will continue to feel the impact, as end users gradually shift their preference to more popular brands and are more willing to invest in their upgrade to larger screen midrange smartphones,” Ooi said of the Asean region.
At home, smartphone ship-ments are expected to post a slight increase by year-end, as users adapt to the digital shift that has been happening in the Philippines for almost a decade now.
“Smartphone shipments are expected to recover in 2018, increasing slightly by 4.3 percent to 16 million units,” Ooi said.