Premium smartphones trigger market boost in Philippines

During first six months of 2018, smartphone shipments posted 5.6 per cent growth

More Filipinos are investing in more premium smartphones, according IDC Philippines' Quarterly Mobile Phone Tracker.

In the first six months of 2018 smartphone shipments reached 7.8 million units, posting a 5.6 per cent growth year-over-year (YoY); a significant increase from the -6.6 per cent decline experienced during the first six months of 2017.

What caused smartphone shipments to bounce back? According to IDC, it was due to a shipments increase from midrange smartphones, with the average selling price (ASP) growing by US$65 from US$192 in the first six months of 2018 compared with US$127 for the first six months of 2017.

However, despite this growth, the Philippines market is still dominated by the ultra-low-end smartphones who hold the biggest market share.

“The higher ASP indicates that end users are willing to invest in a phone with better specifications and features to suit their latest needs,” said Polyne Gallevo, market analyst at IDC Philippines.

"Use of phones have become heavier, aside from end users being accustomed to using smartphones as a platform for capturing, sharing, saving content, and streaming videos, engaging in a higher form of mobile gaming has also been emerging."

Furthermore, the availability of different payment options has continued to make purchasing higher-priced smartphones less taxing for end users, according to IDC.

"Keeping in mind that Filipinos remain to be price conscious and want to ensure they get the best value of their money, brands now highlight not only the quality of cameras but also features that make smartphone usage experience better such as near bezel-less screens, high-speed processors, quality speakers, AI features, and long battery life to ensure the customers that the brand is the bang for their buck,” said Gallevo.

In addition, as the Philippines lags behind much of Southeast Asia in credit card usage, coming in a nine per cent in a 2016 study by Visa, compared to 50 per cent for Singapore, the availability of different payment options has also helped more Filipinos to purchase higher value smartphones.

Payment options such as home credit and flexi finance combined with in-store credit are now available to many Filipinos and have enabled customers who do not own a credit card to get instalment plans to make payments lighter.

The top mobile vendor for the Philippines is Cherry Mobile during the first six months of 2018, however, the local brand experienced a slight decline as it continues to face stiff competition from international brands such as Samsung who came in at second.

Chinese brand Vivo came in at third position during largely to its aggressive marketing efforts, while Chinese brands OPPO and Huawei came in at fourth and fifth positions, respectively.