MANILA: Low-cost models from local manufacturers are driving the rapid adoption of smartphones in the Philippines, which is now the third largest market in Southeast Asia according to new figures.
The latest Asia/Pacific Quarterly Mobile Phone Tracker from researcher IDC revealed that smartphone shipments to the Philippines grew 76% in 2014 compared to the previous year while their share of the mobile phone market jumped from 24% to 47%.
"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," said Jerome Dominguez, Market Analyst at IDC Philippines.
Smartphone models costing less than PHP4,000 (US$90) accounted for more than 58% of all smartphone shipments in 2014, with the third quarter seeing these devices overtake feature phones for the first time.
"The Philippines is now the third largest market for smartphones in Southeast Asia, coming after Indonesia and Thailand," Dominguez added.
This shift is being driven by local smartphone vendors, three of which feature among the top five smartphone vendors in the Philippines in terms of units shipped.
Cherry Mobile was the top smartphone vendor in 2014 with a 21.9% share, with MyPhone (11.2%) in third and Torque (4.8%) in fifth. The remaining two places were taken by Samsung, in second with 13.3%, and Lenovo, in fourth with 6.5%.
Overall, the share taken by local vendors increased from 49% in 2013 to 57% in 2014, while that taken by Chinese vendors slipped from 16% to 15% in 2014, while global vendors saw a seven-point drop from 35% to 28%.
Daniel Pang, senior research manager/Client Devices group at IDC Asia/Pacific, pinpointed the reasons behind the rise of local vendors: "heavy marketing, celebrity endorsements and price-competitive offerings".
"Branding is critical in the Philippines," he explained, "The thriving local vendors are those that not only offer budget-friendly smartphones, but also produce strong ATL campaigns and are endorsed by popular celebrities."
IDC was bullish about the Philippine smartphone market in the coming year, predicting 20% growth and unit prices falling to around PHP2,000 (US$50).
Data sourced from IDC; additional content by Warc staff