BMI View: We expect the Philippines IT market will grow by around 5.1% in 2014, a slight slowdown from 2013 , but nonetheless robust growth. Consumer electronics spending is likely to remain strong, with government spending providing a stimulus supplementing technology trends such as demand for smartphones and tablets. Given the Philippines' low PC penetration, many provincial markets are relatively untapped territories, while rural populations contain the largest number of potential first-time mobile handset purchasers. Vendors will seek profit from product innovation such as lower cost smartphones and tablets based on the Android operating system, and 3D and LED TV sets.
Headline Expenditure Projections
Computer Sales: US$2.3bn in 2013 to US$2.4bn in 2014, +5.4% in US dollar terms. Booming sales of Android tablets will be sufficient to offset the squeeze from declining notebook sales.
AV Sales: US$848mn in 2013 to US$911mn in 2014, +7.4% in US dollar terms. The main driver of demand is flat-panel TV sets, where penetration is rising rapidly.
Handset Sales: US$2bn in 2013 to US$2.1bn in 2014, +4.3% in US dollar terms. Sales of smartphones are booming, particularly low-cost Android devices able to hit mass market price points, increasing the average selling prices for the handset market as a whole.
Key Trends & Developments
The PC market has been transformed by the boom in tablet sales, with volumes almost tripling in 2013. Vendors selling low-price tablets running Android have fared particularly well, and will continue to capture growth in 2014. However, notebook vendors have been hit hard, with declining volumes and pressure on prices. That said, BMI believes notebook vendors could begin to regain market share in the mid-range and high end of the market with hybrid tablet/notebook designs. The latest releases of devices from Windows partner vendors show the potential for multi-functional devices with greater capabilities than Apple and Android partner...