Consumers of smartphones with large screens are shying away from retail stores.
They are, instead, getting their handset upgrades from telcos, which continue to offer huge subsidies in return for two-year mobile service sign-ups.
Retail sales of phablets - the term coined for smartphones with larger screen sizes of 5½ inches (14cm) to 7 inches - have dropped for the first time since research firm GfK Asia started tracking them in 2013.
The latest figures from GfK Asia show that local consumers bought 210,000 phablets in the first six months of this year .
This represents a 19 per cent fall from the 260,000 sold during the same period last year .
Lacklustre demand for phablets caused the decline in the overall smartphone retail market to widen.
In the first six months of this year, consumers picked up 900,000 smartphones, down 23 per cent from the same period last year , which was in turn a drop of 11 per cent from the corresponding period the year before.
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FALLING RETAIL SALES
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PHABLETS
Down 19 per cent from 260,000 in first six months last year to 210,000 this year
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SMARTPHONES
Down 23 per cent to 900,000 in first six months this year from same period last year
"Going by the current trend, we don't expect the demand for smartphones to register any growth this year," said Mr Gerard Tan, account director for technology at GfK Asia.
GfK does not track the telco distribution channel.
However, market research firm IDC includes telcos' share in its device shipment figures.
IDC figures show that in the first quarter of this year, phablet shipment in Singapore more than doubled to 516,000 units compared with the same quarter last year.
This was largely due to the continued strong demand for the iPhone 6 Plus, which started selling in September last year .
IDC has not released second-quarter data yet.
"The new iPhones were very popular via the telco distribution channel," said IDC Asia-Pacific senior market analyst Kiranjeet Kaur.
"Large screen phones are more expensive so consumers prefer to get them with telco subsidies rather than pay over $1,000 apiece at retail stores," she added.
In the first quarter of this year, phablets drove up overall smartphone shipments by 60 per cent to 1.2 million units, according to IDC.
"This year, the smartphone market will continue to benefit from the residual demand for iPhones as Apple is expected to release newer versions," said Ms Kaur.
Marketing manager Aaron Koh, 39, whose two-year mobile contract ends next May, said: "I'm holding out for the year-end launch of the new version of the iPhone 6, which will be more stable and offer better features."
