25 January 2014

It's all about mobile this year for the Philippines

When it comes to the Philippines, it is not about technology so much as it is about mobile technology. 

"The younger segment of the population make up the new workforce. They have the utmost need to be connected, updated, informed and entertained. In most cases, they also have lower number of dependents. All these characteristics point to stronger demand for anything mobile, whether devices, services or applications,” says Jubert Alberto, Research Manager, IDC Philippines.
IDC has forecast that an expected increase of 22% on smartphone spending and 40% on tablet expenditure, coupled with rosy economy indicators, will drive overall ICT spending in the Philippines in 2014. Apart from devices, ICT spending starting this year will be impacted by other aspects of mobility, plus cloud, big data/analytics and social business, as the Philippines embraces these four key pillars of the 3rd platform, IDC said.

Usage of these technologies is being driven by the need of companies for new and effective ways to market and reach out to targeted customers, said the research firm, as well as increasing ICT demand from small and medium enterprises.

The following are some of the top predictions that IDC believes will have the biggest commercial impact on the ICT industry in the Philippines in 2014: 

Mobile data continues to drive telecom growth in the Philippines 

Unlike in other Southeast Asian countries where mobile data will only surpass mobile voice in terms of overall size in 2014, mobile data will continue to drive the Philippines market. Mobile data is expected to grow by 15%, with voice peaking at 7%.

Karen Rondon-Garcia, Research Manager, IDC Philippines, commented: “Popularity of mobile computing devices such as smartphones, mini notebooks and tablets will increasingly translate to actual mobile data usage especially as 3G and 4G coverage improve, and mobile operators become creative in pricing their mobile data services.”

The smartphones and tablets craze will open up bigger opportunities in the 3rd platform space

IDC forecasts 40% growth for tablet shipments to the Philippines in 2014. It is also noteworthy that people in the Philippines patronise local brands more often compared to their Asian neighbours. The country still has a lot of room for growth in the tablet space.

Jerome Dominguez, Analyst, IDC Philippines says, “With the bullish tablet and smartphone growth in the country, novel opportunities within the 3rd platform space of social and mobility will increase - which businesses can utilise to their advantage.”

4. Increasing integration of social media and mobility will give rise to new modes of consumption

With the increase of smartphones and tablets in the Philippines, mobile devices have become the preferred primary devices for consumers. Due to this, social media and mobility have increasingly been integrated. 

Cecilia Santos, Analyst, IDC Philippines, states, “In 2014, more organisations will see the importance of having visibility in the mobile social network and look for more creative ways of selling themselves to their consumers through app partnerships.”

Mobile apps will go more “Pinoy*” than ever

Over the past few years, Pinoy pride has become very apparent. This is driving the need for a plethora of apps developed which have Pinoy flavor and/or which are specific to Pinoy interests and customs. This trend will be likely continue in 2014.

Geolocation will unlock opportunities for commerce

Filipinos are increasingly letting their circles know about the places they frequent, from restaurants, to hang out places to vacation spots through social media. This trend has influenced IDC to forecast that geolocation information will be the game changer in 2014. 

Such data could allow marketers to study the behaviour of current and potential customers based on the places they frequent, their social activities, and interests.

Pervasiveness of mCommerce and mobile banking will rise in 2014

mCommerce and mobile banking are not new to the Philippines. However, the explosion of smartphone sales, coupled with expanding 3G coverage and LTE roll out and improving affordability of mobile data services are leading to demand for applications that allow mobile users to shop for products and tickets, book taxis, and sample content among others. 

The growth in smartphone usage is also putting pressure on banks to provide mobile banking services as more customers are demanding it for its convenience. 

Rondon-Garcia adds, “Additionally, mobile banking is the easiest way for banks to reach a larger population, and bridges the gap between banks and people who have no access to traditional banking facilities, particularly in agricultural areas.

"Furthermore, as online shopping becomes increasingly popular, whether using a smartphone or a personal computer, mobile wallets offered by mobile operators provide customers a means to pay for online purchases even when they have no credit cards, PayPal or bank accounts.” 

More technology players in “next wave cities”

With increased expansion of technology-dependent commercial activities outside Metro Manila, IDC predicts a rise in IT spending across more cities in the country: Sta. Rosa in Laguna, Bacolod, Iloilo, Metro Cavite (Bacoor, Imus, and DasmariƱas), Lipa in Batangas, Cagayan de Oro, Malolos in Bulacan, Baguio, and Dumaguete.

*Pinoy is a term often used to describe something that is uniquely Filipino.