Philippine smartphone vendors lose out to China rivals

Smartphone shipments in the Philippines fell 10 per cent year-on-year in Q2 to 4 million units as domestic vendors scaled back their offerings in the face of tougher competition from Chinese rivals, according to IDC.

Philippines vendors' combined market share dropped to 41 per cent from 49 per cent during the same period of 2016. Global makers' share remained flat at 27 per cent, while Chinese vendors' share rose to 22 per cent from 15 per cent in Q2 2016.

Jerome Dominguez, IDC market analyst for Asia Pacific, said Oppo and Vivo disrupted the smartphone retail space through cash-rich marketing, aggressive sales incentives and high levels of retailer support.

"This challenged the traditional vendor-dealer relationship smartphone vendors have been accustomed to, and while leading vendors have been able to adapt, smaller players with less marketing and merchandising budget were unable to do so, thus suffering drops in market shares," Dominguez said.

Despite the increased competition from Chinese manufacturers, IDC noted Philippines vendors maintained a much larger share of the market than peers in Indonesia (19 per cent), Thailand (11 per cent), Vietnam (6 per cent) and Malaysia (1 per cent).

RankingCherry Mobile maintained its lead in the Philippines smartphone market, with sub-$50 smartphones driving volume highs, IDC said. Samsung was second followed by Oppo, Cloudfone and Vivo.

IDC expects the smartphone market in the Philippines to remain subdued in Q3 due to increases in component prices, the weaker Philippines peso and the expected exit of a number of smartphone vendors. Shipments are forecast to pick up in Q4 as the pre-Christmas buying season encourages healthier smartphone uptake.

Source: Philippine smartphone vendors lose out to China rivals