Philippines is the fastest growing smartphone market in ASEAN

MANILA — Smartphone spending in the Philippines is now the fastest in the Southeast Asian region driven by surging consumer demand on a very nascent market populated by active players according to market research firm IDC.

A total of 3.5 million smartphones were shipped to the Philippines in the first quarter of the year, up by a fifth according to IDC.

“With many of the more mature smartphone markets of the world already displayed signs of saturation, the Philippines smartphone market continues to enjoy robust growth owing to a relatively low smartphone penetration rate (30% in 2015), active local brand presence, and healthy consumer spending,” Jerome Dominguez, IDC Philippines market analyst for mobile devices, said in a press release.

Strong growth is being driven largely by predominance of cheap devices being peddled by local vendors. According to IDC, smartphones below P3,500 still corner bulk of the market. But though local companies have seized majority of the market, Chinese and other global vendors are now also gradually catching up. IDC noted that Samsung and ASUS is now playing more aggressively in the sub-P6,000 space, while China-based vendors such as OPPO and Huawei are also expanding their footprint.

But as the market continually matures, demand is also growing on more premium models. Dominguez said that there is now expanding demand away from 1 GB RAM devices toward higher RAM chips. IDC data showed that from 44% share in 2015, sub-1GB RAM smartphones dropped to 38% last quarter.

Amid surging smartphone growth, IDC said another key battleground would be innovation and after-sales service.

“Defect issues and poor after-sales continue to plague the smartphone market. It is only a matter of time before majority of Filipino consumers put more premium on smartphones that are not just easy on the pocket but also offer good value for money,” said Dominguez.

IDC expects total smartphone shipments this year to grow by a quarter.