Philippines is Southeast Asia’s fastest-growing smartphone market in Q1

Taguig City in the Philippines. Photo credit: Achim Voss.

The Philippines has hit a milestone in smartphone growth. IDC today announced the nation was the fastest-growing market for smartphones in Southeast Asia for the first quarter of the year.

During the period, a total of 3.5 million smartphones were shipped to stores in the Philippines, marking a 20 percent year-on-year growth.

That bucked the declines seen by most Southeast Asian countries, IDC market analyst Jerome Dominguez tells Tech in Asia.

Indonesia’s smartphone shipments grew only 3 percent in the first quarter, while other countries posted dips – Malaysia (down 20 percent), Thailand (the same), Singapore (down 13 percent), and Myanmar (down 1 percent).

Jerome attributes the growth in smartphone adoption among Filipinos to “stronger support from telco operators” in the form of higher subsidies.

“For instance, MyPhone’s partnership with Smart Communications paved the way for an affordable [US$19] prepaid smartphone kit that comes with mobile data allocation. Apple’s shipments also grew partly due to lower cash-out requirement and more attractive data and app bundles for iPhones offered by telcos,” he explains.

Local vs foreign

Local phone brands – led by MyPhone, followed by Cherry Mobile, CloudFone, and O+ – dominated the Philippine smartphone market as they flooded it with cheap options for US$75 and below.

But the homegrown brands cannot rest on their laurels. Foreign phone makers, particularly Chinese ones, are gradually catching up on the budget segment.

“The past few quarters have shown vendors like Samsung and Asus playing more aggressively in the lower-than-[US$130] space. China-based vendors Oppo and Huawei are also on a steady growth track as they continue to expand channel coverage,” notes Jerome.

IDC expects the smartphone market in the Philippines to grow by 25 percent this year, equivalent to 18.3 million shipments.

As more people own smartphones, IDC Philippines country head Jubert Alberto says telco operators must keep an eye out for further network congestion and adjust accordingly. “Mobile data explosion is an inevitable consequence of the growing smartphone user base so telcos should carry on with further expansion of their capacity and footprint nationwide. In terms of increasing accessibility, it is also not enough for the telcos to provide subsidies to device manufacturers; rather, it should also keep in check the price of mobile internet, which still continues to be among the most expensive in ASEAN.”

Converted from Philippine peso. US$1 = PHP 46.46.