5G devices start to take centre stage in the Philippines

Growth in 5G smartphone shipments during the second quarter came in at 56.1 per cent.

The growth of 5G mobile devices in the Philippines is beginning to outstrip the continued growth of the broader smartphone market in the country, new research has revealed.

According to industry analyst firm IDC, the Philippines smartphone market grew 22.6 per cent year-on-year in the second calendar quarter of 2021, representing the fourth consecutive quarter of year-on-year growth for the segment.  

However, growth in 5G smartphone shipments specifically, over the same period, came in at 56.1 per cent, far outstripping the overall smartphone segment growth rate, albeit from a lower base.  

According to Angela Jenny Medez, client devices market analyst at IDC Philippines, much of this growth came as Chinese 5G device vendors battled for market share.

“5G shipments accounted for more than 10 per cent of total shipments, growing by 56.1 per cent compared to the previous quarter as prices declined by 41.5 per cent quarterly to US$470 due to the aggressive pricing among Chinese vendors,” Medez said.

“Feature phone and 3G smartphone shipments continued to dwindle, reflecting the willingness of Filipinos to spend more for better functionality as well as the successful 4G LTE campaigns by telcos,” she added.

It should come as little surprise, then, that the majority of the top five smartphone vendors in the second quarter are Chinese companies, with Xiaomi, Oppo and Vivo named among the list of top players.

Credit: IDC

India-headquartered Realme accounted for 24.4 per cent of the total market, clinching the top spot for two consecutive quarters. Its ultra-low-end segment – devices sold for less than US$100 – grew by 140 per cent quarter-on-quarter, according to IDC.

Meanwhile, Vivo made a comeback in the top five, IDC said, securing the second spot by doubling its shipments as it brought in more units in the ultra-low-end and low-end segments, the latter of which captures devices sold for between US$100 and US$200.

Xiaomi, which is quickly acquiring market share in many regions around the world, rose in prominence to third spot by expanding further on its already substantial online channels as well as its increased focus in the mid-range segment, which incorporates devices worth between US$200 and US$400.  

Xiaomi brought in affordable 5G models during the quarter by launching the Note 10 5G series, lowering its mid-range model prices by 14.3 per cent, IDC noted.  

South Korean smartphone powerhouse Samsung took the fourth spot by launching several A series models and increasing shipments in the ultra-low-end segment. It grew almost threefold in this segment compared to the previous quarter, accounting for 27.3 per cent of total shipments.

At the same time, Oppo secured the fifth spot despite its shipments contracting by 14.5 per cent compared to the previous quarter. The company dropped its prices across almost all models and launched its A54 model, which accounted for more than a quarter of its total shipments.

"As new Covid-19 variants continued to dampen the recovery of the country and forced the reinstatement of lockdowns, vendors pre-emptively brought in more entry level smartphones and cut down on prices as more people are buying cheaper phones,” said Medez.

“This dragged overall prices down to US$186 in comparison to the US$199 from previous quarter, as vendors pushed unit sales at the cost of lower margins.

“As uncertainty around the Covid-19 looms, we are anticipating smartphone vendors to bring in more models in the ultra-low-end segment to keep prices affordable despite rising component prices in order to push sales as consumers cut back on spending,” she added

According to Medez, despite supply concerns, vendors are now in a better position to manage their supplies than they were at the beginning of the pandemic.

"The market sustained its growth due to the rising need among consumers for mobile devices especially during these times,” she said.

Earlier this year, IDC said that the global smartphone market was expected to ship 1.38 billion units in 2021, growing by 7.7 per cent year-on-year and representing the largest yearly growth in shipments since 2015.

IDC also suggested that the global market was continuing to shift towards 5G networks.

In fact, the firm claimed that 5G shipments were predicted to grow by nearly 130 per cent in 2021, with nearly all regions outside of China to see triple-digit growth by the end of the year.

This growth comes despite fears the global chip shortage would soon begin hitting smartphone manufacturers after car makers found themselves struggling to source chips due to pandemic-related demand.