Philippines moves up to become 3rd largest smartphone market in Southeast Asia

In a milestone for smartphone growth in the Philippines, the nation is now the third largest market for smartphones in Southeast Asia. Jerome Dominguez, market analyst at IDC in the Philippines, tells Tech in Asia that the Philippines overtook Vietnam in 2014, which now drops to fourth. Indonesia is first, while Thailand is second.

This is thanks to the growing adoption of smartphones by consumers. According to IDC, a total of 26.8 million mobile phones were shipped to the Philippines in 2014. The ratio of smartphones increased to 47 percent in 2014, up from 24 percent in 2013.

Smartphone shipments to the Philippines registered a healthy 76 percent growth year-on-year, with the surge being fueled by budget offerings from local vendors. While feature phones still made up the majority of the mobile phone market in 2014, the past months saw both local and international vendors increasingly shifting their focus toward smartphones. Prices of smartphones continue to drop as component prices fall and original equipment manufacturers are able to produce cheaper smartphones.

“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,” adds Dominguez.

Philippine brand Cherry Mobile beat Samsung in 2014 to become the nation’s top smartphone brand, says IDC, repeating the feat Cherry first achieved in 2013.

Smartphones get cheaper

Sub-smartphone models worth PHP4,000 (US$90) accounted for more than 58 percent of smartphone shipments to the country last year.

Dominguez notes the Philippines is also the fourth country in Southeast Asia to ship more smartphones than feature phones, after Singapore, Malaysia, and Thailand. He says the third quarter of 2014 was the first time that smartphone shipments surpassed those of feature phones in the Philippines, marking the onset of a new era.

IDC remains bullish about the Philippine smartphone market in 2015, with smartphone shipments expected to grow 20 percent. Feature phone shipments, on the other hand, are expected to fall 20 percent this year as more brands shift their focus to smartphones.

IDC says it also expects smartphone prices to continue to go down as vendors further push prices to the PHP2,000 (US$50) level.