Philippines smartphone shipments fall for first time
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Smartphone shipments in the Philippines have declined 7% to approximately 15 million units in 2017, according to IDC.
The research firm’s latest Asia/Pacific Quarterly Mobile Phone Tracker and Asia/Pacific Quarterly Personal Computing Device Tracker also revealed that tablet shipments fell 30% year-over-year (YoY) to just 1 million units.
Smartphone shipments recorded the first decline since its introduction into the local market as intense competition from top brands – such as Samsung, OPPO, and vivo – resulted in some vendors being ousted from the market.
According to IDC, Philippine users are shifting to handsets with higher specs and better features, going against the traditional observation of device users in the Philippines being among the more price-sensitive in Asia-Pacific.
Jensen Ooi, Senior Market Analyst, Client Devices, IDC ASEAN noted that while end users will continue to consider specs as one of the important factors when purchasing their next smartphone, the next “wow” factor they will be looking out for are the features that enhance their experience.
“In the short term, they would also consider the latest appealing features with the most relevant use cases, namely multiple cameras that enhance the photography and 18:9 screens that give a better viewing experience. These features were only limited to high-end flagship phones in the past but have become more commonly available in reasonably priced midrange (US$200<US$400) handsets as well now,” he added.
On-device AI remains at this point.
“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.”
Despite this, the average selling price of smartphones in 2017 grew to $134, a 13% YoY increase with ultra low-end smartphones (<$100) holding the lion’s share of the market, accounting for 59% of all smartphones in 2017 compared with 67% in 2016. Meanwhile the combined share of low-end ($100-$199) and midrange ($200-$399) smartphones grew to 35% from 28% in 2016.
Samsung and Chinese brands such as OPPO and vivo were the key driving brands that led to the growth 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,” Ooi said.
“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.”
From a screen size perspective, phablets (5.5”-6.9”) 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,” Ooi added.
The loser in this trend are slate tablets (7”-10.9”) which are seeing declining says because they cannot offer the same level of practicality that phablets provide.
Trending in 2018
The smartphone market in the Philippines is expected to rebound in 2018 as competition between popular brands, which will continue to strengthen their positions, and local and minor brands, which will continue to struggle to stay relevant, intensifies. “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,” Ooi concluded.
Questions & Answers
Q.What caused the overall decline in smartphone shipments in the Philippines for the first time?
What caused the overall decline in smartphone shipments in the Philippines for the first time?
Intense competition from top brands such as Samsung, OPPO, and vivo led to some vendors being forced out of the market. This reduced their supplies, which ultimately impacted total smartphone shipments.
Q.Why are tablet shipments continuing to fall in the Philippines?
Why are tablet shipments continuing to fall in the Philippines?
Tablets are declining because their significance in the market has waned due to a lack of practical use cases. They are also being cannibalised by smartphones that now offer larger screen sizes.
Q.Which specific features are Philippine users now looking for in midrange smartphones?
Which specific features are Philippine users now looking for in midrange smartphones?
Users are looking for features that enhance their experience, such as multiple cameras for improved photography and 18:9 screens for a better viewing experience. These were previously limited to high-end phones.
Q.How did the average selling price of smartphones change in 2017 despite the shipment decline?
How did the average selling price of smartphones change in 2017 despite the shipment decline?
The average selling price of smartphones grew by 13% year-over-year to $134 in 2017. This increase occurred despite a fall in the market share of ultra low-end smartphones.
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