Smartphone vendors see market share shrink in Q2

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Local smartphone vendors saw market share shrink in the second quarter due to heightened competition from Chinese imports, data from research firm International Data Corporation (IDC) showed.

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Local vendors saw their market share shrink to 41 percent from 49 percent a year earlier.
Smartphone shipments to the Philippines by 10 percent to 4 million units.

“The smartphone market declined compared to last year’s number due to downscaled local vendors, except Cherry Mobile and Cloudfone, as they face tougher competition from Chinese vendors,” IDC said.

The Chinese vendors’ share of the Philippine smartphone market soared from 15 percent to 22 percent, while the share of global vendors was flat at 27 percent—only Samsung performed stronger.

The top 5 five vendors in the second quarter of this year were Cherry Mobile, Samsung, Oppo, Cloudfone and Vivo.

“OPPO and Vivo disrupted the smartphone retail space through cash-rich marketing, aggressive sales promoter incentives and previously unseen levels of retailer support,” said Jerome Dominguez, market analyst for client devices at IDC Asia/Pacific.

“This challenged the traditional vendor-dealer relationship smartphone vendors have been accustomed to. Smaller players with less marketing and merchandising budget at their disposal were unable to do so, thus, suffering drops in market shares,” he added/

The rise of the two Chinese brands reflected the need for an expansive sales and distribution approach with strong marketing and advertising strategies to catch the attention of consumers, IDC said.

Global and local vendors cut down their marketing budgets in 2016 but are investing again in integrated marketing campaigns this year.

“As the battle for mindshare intensifies, top global and local mobile phone vendors were left with no recourse but to double down on marketing spending to maintain the brand presence. Aside from the tried-and-tested formula of appointing A-list celebrity endorsers and conducting roadshows, new marketing strategies such as co-branding and strategic product placements are being explored by local and global vendors as means to remain competitive against Chinese vendors,” Dominguez said.

Local vendors, meanwhile, remain competitive compared to other countries in Southeast Asia, such as Indonesia, Thailand, Vietnam and Malaysia.

“Despite the heightened competition from Chinese smartphone vendors, local vendors in the Philippines remain in better standing relative to local vendors in neighboring Southeast Asian countries, reflecting the still solid affinity of Filipinos for homegrown smartphone brands,” it said.

“IDC expects the smartphone market in the Philippines to stay subdued in the next quarter of 2017 due to increase in component prices, weaker Philippines peso and impending exits of a number of smartphone vendors. Shipments are expected to pick up during the last quarter of the year as pre-Christmas buying season encourages healthier smartphone uptake.”

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