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The IDC report shows that higher prices hurt smartphone sales in the fourth quarter

A sustained decline in smartphone shipments is expected even in the latest quarter when spending is usually supported by the holiday season as sellers slow to replenish inventories amid rising consumer prices.

International Data Corporation (IDC)’s quarterly mobile phone tracker report showed that smartphone shipments fell for the fifth consecutive quarter in the July-September period.

In the third quarter, device shipments fell 8 percent from the previous quarter and 6.8 percent year-over-year.

“The smartphone market in the Philippines contracted rapidly in the third quarter as inflation accelerated, exacerbated by the recent typhoons, hurting consumers and sellers alike,” said Angela Medes, senior market analyst, IDC Philippines.

“Resellers have taken a more conservative approach by clearing inventories, maintaining prices of existing models, and maintaining momentum by providing affordable smartphones,” it added.

Meedes explained that the last quarter was usually when smartphone sales peak due to the holiday buying spree.

But since inflation is expected to persist and peak towards the end of the year, we expect an annual decline in shipments by the end of 2022 as sellers lower targets for the upcoming holiday season by controlling inventories and increasing prices of newer models to counteract the depreciation of the currency,” she warned.

3.9 million units shipped during the third quarter, most of which was Realme’s 23.4 percent share. The Chinese smartphone brand recently introduced a new mid-range model realme 10, which has a suggested retail price of P12,999.

Transsion, Samsung and Oppo have roughly the same market share at around 15 percent each. Vivo accounted for 13.2 percent while other brands made up the remaining 16.6 percent.

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

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