The smartphone market in the Philippines grew at 4% year-on-year (YoY) in 2018 due to aggressive marketing from Chinese brands, according to the latest research from Counterpoint’s Model Sales Tracker service. After a slow start in the first quarter of the year, smartphone sales recorded YoY growth in the remaining quarters. Commenting on the findings, Associate Director, Tarun Pathak said, “Chinese brands, especially Huawei, Vivo, and OPPO have gained significant mindshare among Filipinos. Aggressive marketing, association with celebrities and retail merchandising has helped them gain a foothold in the market. Meanwhile, local brands continue to decline in terms of shipment and their target category has been restricted to the sub-US$100 price band. This is also consistent with market conditions in neighboring South East Asian countries.” China’s HOVX (Huawei, OPPO, Vivo, and Xiaomi) together captured 43% of the smartphone market in 2018. Huawei’s performance was the most impressive. It captured 11% market share with the popularity of its Y6 2018 and Nova 3i. While smartphone sales increased, the overall handset market fell 11% YoY due to a 39% YoY decline in feature phone sales. In fact, 77% of the total handsets sold in 2018 were smartphones. Commenting on the pricing strategies, Senior Analyst, Hanish Bhatia added, “The market moved towards higher price bands in 2018 as first-time smartphone users upgraded. Easy financing options are also enabling Filipinos to purchase smartphones in a higher price range. In 2019, competition in the entry-level and budget category is expected to intensify further with more Chinese brands targeting this price band.”

Exhibit 1: Philippines Smartphone Shipments Share by Brands

Source: Counterpoint Research: Model Sales Tracker CY2018

Market Summary:

• Samsung captured nearly one-fifth of the total smartphone market, closely followed by Cherry Mobile. Galaxy J series remained extremely popular, especially Galaxy J2 Prime.
• Cherry Mobile remains the second largest brand in the Philippines, driven by Flare series. Flare J3/J3 Lite remained the most popular entry-level smartphone.
• Overall, the sub-US$100 price band captured nearly 44% of the smartphone market in 2018, as compared to 56% last year. Meanwhile, US$100-US$249 price band accounted for 42% of the smartphone market in 2018, as compared to 34% during last year.
• The Chinese onslaught has led to a significant decline of local brands, such as Cherry Mobile and MyPhone. China’s HOVX brands also managed to marginally dent Samsung’s market share.
• Apple’s share continues to decline in the market, due to its higher pricing. However, it still managed to capture 2.5% of the smartphone market driven by sales of previous generation iPhone models.
• The telecom operators Smart (PLDT) and Globe continue to invest in infrastructure to deploy LTE base stations to across the country. Improved network coverage along with rising social media and content consumption is driving smartphone sales among young consumers.

The comprehensive and in-depth CY2018 Model Sales analysis is available for subscribing clients. Please feel free to contact us at press(at)counterpointresearch.com for further questions regarding our latest research, insights or press enquiries. The Model Sales research is based on sell-through estimates based on vendor’s IR results, vendor polling triangulated with sell-in (shipments), supply chain checks and secondary research. Analyst Contacts: Tarun Pathak +91 997-121-3665 [email protected] Hanish Bhatia +91 987-184-9857 [email protected] Follow Counterpoint Research [email protected]