IDC: Philippines now the third-largest smartphone market in Southeast Asia

According to a new research from IDC, the Philippines has overtaken Vietnam to become the third-largest smartphone market in Southeast Asia in 2014. Growth in the market was 78 percent YoY as a flood of budget smartphones continue to take over the feature phone market. Sub-$100 smartphones made up about 58 percent of the sales of the said segment in the Philippines last year.

It should be noted that while Vietnam fell to the fourth-largest smartphone market, its market also grew to about 28.7 million units shipped in 2014, a growth rate of about 13 percent. However, smartphones represented only about 41 percent of all mobile phones sold.

Interestingly, it wasn’t Chinese brands that have made the most headway as they have in other markets such as India. Local vendors, such as unit market share leader Cherry Mobile and third-place vendor MyPhone, have made gains in the market with budget-priced Android devices, and both firms have released Mediatek-based Android One smartphones earlier this year. Overall, local vendors grew their units shipped market share from 49 percent in 2013 to 57 percent in 2014, with Cherry Mobile holding 21.9 percent of the market and MyPhone holding 11.2 percent. Daniel Pang, senior research manager of the Client Devices Group at IDC Asia/Pacific, commented that, “The success of local smartphone players is an offshoot of heavy marketing, celebrity endorsements and price-competitive offerings. Branding is critical in the Philippines. 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.”

The market for smartphones in the Philippines is expected to grow another 20 percent in 2015, with feature phones declining by about the same percentage. Essential features for the market include dual-SIM functionality and an FM radio tuner. While sub-$100 phones are currently the standard, IDC expects smartphones that dip below $50 to become more common and far more popular in 2015. As the market remains quite fragmented, there appears to be ample opportunity for brands with low visibility to gain a foothold in the market.