[Editorial] Can local branded smartphones sell well if priced beyond Php13,000?

[Editorial] Can local branded smartphones sell well if priced beyond Php13,000?

How much will the Starmobile Knight sell for?
How much will the Starmobile Knight sell for?

Will local smartphone flagships fly with prices past Php13,000?

Local smartphone brands are gearing up for the release of their Q3-Q4 offerings and it looks like most of them will be launching quad-core 5-inch HD smartphones with 12-megapixel shooters. Their devices will be slim, lightweight, and definitely technological beauties. The biggest question people are asking now is how much will they sell their wares? Starmobile teased us with the gorgeous Starmobile Knight and the Starmobile Diamond V7 during their recent launch but the pricing wasn’t announced yet. Cherry Mobile also has a fresh wave of 2.0 smartphones for June but we don’t know their prices as well. We also heard that MyPhone is set to debut a follow-up to the highly successful MyPhone A919i Duo. A lot of people are guessing that their flagship offerings will cross the Php10,000 mark already seeing as their current smartphones are already tipping near Php10,000. Is this a wise move?

Alora holding up the MyPhone A919i Duo and the venerable Samsung Galaxy S3
Alora holding up the MyPhone A919i Duo and the venerable Samsung Galaxy S3

At Php13,000 the playing field expands, global brands join the fray

Here’s the biggest problem with pricing local branded smartphones beyond Php13,000. They’re crossing over to the territory of the global manufacturers. Let’s take a look at the prices of some very familiar smartphones:

  • Samsung Galaxy Grand: Php12,800 (Dual-core Phablet)
  • Samsung Galaxy S3: Php17,300 (Quad-core)
  • LG Google Nexus 4: Php14,990 (Quad-core, Nexus, Gorilla Glass front and Back)
  • LG Optimus 4X HD: Php14,990 (Quad-core)
  • Sony Xperia V: Php14,400 (Dual-core, Water-resistant, LTE)
  • Sony Xperia SP: Php15,400 (Dual-core LTE)

*Prices from Widget City

As you can see the price difference between Php13,000 priced local flagship devices is very thin when compared to the handsets we mentioned above. Among all of them the one that definitely caught our attention was the LTE-powered Sony Xperia SP at Php15,400. Slip in a Smart prepaid LTE SIM into that and you have ridiculously fast internet on-the-go. You can even turn on the hotspot and you’re good for your laptop.

Sony Xperia SP
Sony Xperia SP

Spec per spec, the local branded smartphones have advantages over these devices but they’re really going up against global brands that have invested millions of dollars in marketing into building their own respective followings. A lot of consumers will probably be blinded by this and go for the offerings of Samsung and Sony instead.

So what should local smartphone brands do?

Given this scenario, we’re seeing three possible courses of actions for local smartphone brands.

Option 1: Keep margins low, keep pricing low.
Keep doing the volume play. Profit margins will be low but revenue will still be there since you will sell a whole lot more of units than other manufacturers.

Option 2: Infuse more capital and invest in customer support, after-sales service
Stick to the 13k and up pricing for better margins… BUT infuse more capital so that you can invest in after-sales service centers for customer support. Durability and reliability is probably one of the biggest concerns of local smartphone customers. This can be addressed by having efficient and accessible service centers.

Option 3: Go Hyperlocal
Expand customer touchpoints by going really local. Be present in provincial malls and shopping centers. Intensify local marketing efforts as well using Guerilla tactics. Make the product more relevant to Filipinos.

So… can local smartphones succeed if they’re priced more than Php13,000? Personally I think it’s a tough sell at this point. The good news is that some of these companies are starting to seriously look into improving their aftersales service by offering OTA updates and more service centers. However they need to step this up a few more notches if they want to go head-to-head with the likes of Samsung and Sony in the mid-premium price category (it’s a forgone conclusion that when it comes to budget offerings local brands dominate).

How about you guys? What do you think? Will you buy local branded smartphones for more than Php13,000? Let us know in the comments below. We’ll send this link to the managers of the local smartphone brands so they can read your views. 🙂

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