The boom in smartphone sales in Africa is slowing, despite the fact that overall mobile handset shipments were up slightly in Q2 2016, with shipments of basic feature phones rising 31.9% year on year to total 29.8 million units.
This is according to the latest figures from IDC's recently published Worldwide Mobile Phone Tracker, which notes shipments of smartphones in Africa fell 5.2% to 23.1 million units in the second quarter of 2016.
IDC says SA and the North African countries of Morocco, Algeria, and Tunisia remain the most developed handset markets on the continent.
It notes the northern trio showed continuing strong growth in the smartphone space, with long-term evolution (LTE) handsets accounting for three-quarters of smartphones sold in the region.
"The launch of 4G is giving a boost to the mobile business in North Africa, and telecom operators have made huge investments in new LTE networks, says Nabila Popal, research manager for mobile phones at IDC Middle East, Africa, and Turkey.
"As a result of these investments, 4G services are now being offered at affordable prices to a growing band of customers."
In SA, the most significant change was the continued growth of the low-price smartphone segment, with devices priced below $100 (retail price less VAT) now accounting for more than two-thirds of the country's Android sales, says IDC.
This space has evolved after top-end sales became well-established in the market due to the country's substantial post-paid segment, which is a rare feature of the operator environment in Africa, it adds.
In Nigeria, the continent's most populous country and biggest handset market, there was a sharp slowdown in growth in Q2 2016, with total smartphone shipments down 6.8% year on year, says IDC.
Sales of 4G phones in Egypt, Africa's second-largest mobile phone market, surged in anticipation of the impending launch of LTE networks. Such phones accounted for almost twice as many shipments as 3G devices during the quarter.
However, in the extremely price-conscious markets of Sub-Saharan Africa (excluding SA), 3G phones remain the predominant choice.
IDC believes the smartphone market will continue to grow in Africa, particularly after the current commodities slump eases.
However, sales are unlikely to reach the rates seen a year or two ago now that many urban markets are becoming saturated, it says.
Despite downturns in many economies, Africa retains significant long-term growth potential when compared with other developing regions, particularly as smartphone penetration across the continent remains relatively low, says Simon Baker, senior program manager for mobile phones at IDC Central and Eastern Europe, the Middle East and Africa.
Juniper Research estimates the number of global smartphone shipments reached 320 million in Q1 2016, representing a year-on-year decline of nearly 6%.
Linda Sui, Director at Strategy Analytics, notes global smartphone shipments grew a sluggish 1% annually from 338.0 million units in Q2 2015 to 340.4 million in Q2 2016. Smartphone growth has slowed due to increasing penetration maturity in major markets like China, she adds.
Likewise, Gartner says global smartphone sales will continue to slow and will no longer grow in double digits.
It expects worldwide smartphone sales to grow 7% in 2016 to reach 1.5 billion units down from 14.4% growth in 2015. In 2020 smartphone sales are on pace to total 1.9 billion units, adds Gartner.
As the market as a whole slows, smartphone vendors need to adjust to targeting the replacement market, says Gartner.
Large growth in other areas, such as Africa, is unlikely unless there is a dramatic reduction in the average selling price of lower-end smartphones, meaning that the market decline will to continue throughout the year.
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