While the smartphone market is expected to rebound along with economic recovery in 2022, vendors and retailers will likely have to consider consumer sensitivity in the midst of rising inflation and price hikes in basic commodities.
“Higher prices among commodities will cause spending to fall especially in a price sensitive market such as the Philippines,” Angela Jenny Medez, Client Devices Market Analyst at the International Data Corporation (IDC) Philippines, said in in a recent e-mail interview with BusinessWorld.
Earlier, the International Data Corporation (IDC) projected double-digit growth for the smartphone market in the Philippines this year after falling 5.6 percent on a year-on-year basis (YoY) in 2021.
The Philippine Statistic Authority (PSA), meanwhile, announced that headline inflation in both January 2022 and February 2022 were at 3 percent. This is within the target range of the Bangko Sentral ng Pilipinas (BSP), which is 2 percent to 4 percent. Analysts forecast the March 2022 inflation to be quicker, however, with estimates ranging between 3 to 5 percent. The PSA is set to release its next inflation report on April 5.
Will Wong, Client Devices Research Manager at IDC Asia/Pacific, observed the recent spike in fuel prices will have a direct impact on smartphone firms’ business operations, particularly on logistics and power consumption.
“Nevertheless, Chinese OEMs (original equipment manufacturers) have been more resilient after experiencing the COVID-19 disruptions and component shortages,” Wong said, noting how Chinese OEMs will be prepared to tackle any uncertainties.
“Nevertheless, one thing to note is that Russia’s smartphone market size is 1.7 times larger than that of the Philippines. Thus, instead of only one single market, it will be more favorable to shift the focus to the overall Asian market where the Chinese OEMs have a relatively stronger market position,” he added.