Rising prices hurting smartphone sales in Q4, IDC report shows

A continued decline in smartphone shipments is expected even in the last quarter when spending is usually supported by the holiday season as vendors slow down on replenishing inventories amid the rising consumer prices.

International Data Corp.’s (IDC) Quarterly Mobile Phone Tracker report showed that smartphone shipments dropped for the fifth consecutive quarter in the July to September period.

In the third quarter, the shipments of the device fell by 8 percent from the previous quarter and 6.8 percent on an annual basis.

“The Philippine smartphone market quickly shrank in the third quarter as inflation accelerated, further aggravated by recent typhoons, hurting both consumers and vendors,” IDC Philippines senior market analyst Angela Medez said.

“Vendors took a more conservative approach by clearing inventories, maintaining prices of existing models, and sustaining momentum by bringing in more affordable smartphones,” she added.

Medez explained that the last quarter was usually when sales of smartphones peak because of the holiday buying spree.

“But as inflation is expected to linger and peak towards the end of year, we anticipate an annual shipment decline towards the end of 2022 as vendors will lower targets for the upcoming holiday season by controlling inventories and increasing prices for newer models to counter the depreciating currency,” she warned.

The 3.9 million units shipped during the third quarter were mostly accounted for by Realme at 23.4 percent. The Chinese smartphone brand recently introduced a new midrange model realme 10, which has a suggested retail price of P12,999.

Transsion, Samsung and Oppo have about the same market share of around 15 percent each. Vivo had 13.2 percent while other brands made up the remaining 16.6 percent.

IDC noted that the ultra low-end segment, which costs less than $100 per unit, grew by 20.7 percent quarter-on-quarter and 21.3 percent on an annual basis in the third quarter. This was supported by vendors Realme with Narzo series and Infinix with Smart and Hot Play series, which were “aimed at targeting the entry level market as consumers sought cheaper options.