Phone purchases pick up post-COVID

MANILA, Philippines — As the economy bounces back from the pandemic, Filipinos are starting to invest in new phones again, and they are mostly purchasing Chinese brands priced below $200.

According to the mobile phone tracker of International Data Corp. (IDC), the Philippines logged in a 3.8 percent hike in smartphone imports to 16.9 million units last year.

In the fourth quarter alone, over 80 percent of the 5.6 million shipments were in the $200 and under price band.

As such, the country snapped a two-year decline in phone shipments during the pandemic, when the lockdowns dried up the savings of Filipinos, cutting their budgets for several items.

IDC said brands from China made up four in five of these units purchased by Filipinos. Transsion – the maker of low-cost phones Infinix, itel and Tecno – took the top spot, growing 98.3 percent annually and accounting for over one-third of total shipments in 2023 as the company reached a new high with all three sub-brands positioned in the ultra low-end segment. Tecno, in particular, started to move upward with the introduction of its Phantom series in 2023, the company’s first smartphone at a over $500 price point.

On the other hand, other vendors slowed, with Realme registering the biggest annual decline of 27.6 percent, dropping to second spot as vendors struggled to compete in the $200 segment.

Realme made up 15.9 percent of the market, while OPPO placed third with 12.2 percent. Likewise, Chinese brand Vivo grabbed a share of 11.3 percent, while Xiaomi rounded up the list with 9.8 percent.

Notably, the largest phone manufacturers – Apple and Samsung – failed to make it to the top five list of the most preferred brands of Filipinos.

IDC client devices senior market analyst for the Philippines Angela Medez said Transsion picked up more than a third of the market for positioning itself as the most affordable brand.

Rivals, including other Chinese companies, struggled to compete with Transsion in the demand for phones below $200. As a result, the average selling price of phones in the Philippines fell by 15 percent to $169 in 2023, from $200 in 2022.

Medez said around 80 percent of the phone shipments in the fourth quarter of 2023 were sold at less than $200, encouraging Filipinos to spend part of the Christmas bonuses on a new unit. IDC expects the Philippine demand to be sustained in 2024.

“The market made a strong comeback toward the end of 2023, driven by year-end holiday festivities and Transsion’s new product lineup, propelling the $100 price segment to more than double both quarterly and annually,” she said.

IDC believes that local demand for phones will be bolstered by the continuous decline in inflation and the resurgence of consumer spending in the pandemic aftermath.

“The IDC has raised forecast for 2024 given the high performance in [the fourth quarter of 2023] and optimistic economic outlook, as inflation continues to decline and private spending grows,” Medez said.