Africa's smartphone market sees 6.4% decline QOQ

Feature phones continue to account for a majority share of Africa's overall mobile phone market.
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Feature phones continue to account for a majority share of Africa's overall mobile phone market.

Africa's smartphone market experienced a quarter-on-quarter (QOQ ) decline of 6.4% during Q4 2017.

This is according to the latest report by International Data Corporation's (IDC) quarterly mobile phone tracker, which shows that smartphone shipments in Africa were down to 20.3 million units for the quarter.

This, notes IDC, represents an 18 year-on-year (YOY) decline, meaning the YOY improvement seen in the previous quarter did not extend to the year's final - and traditionally strongest - quarter.

However, the continent's two biggest markets saw extremely strong growth, with shipments up 19.9% quarter-on-quarter in Nigeria and 27.0% quarter-on-quarter in South Africa. North Africa also experienced a slight increase, although there were declines across most other markets, which explains the region's overall decline, adds the report.

"Major campaigns took place around Black Friday and during the lead up to Christmas, which positively impacted consumer spending in Nigeria and SA," says Ramazan Yavuz, research manager at IDC.

"While Nigeria continues to recover from recession and consumer spending is on the rise, there are also clear signs of improvement in South Africa. The end to the political crisis means that challenging economic conditions will be addressed as a priority by the new government, which will have a positive effect on consumer confidence and spending on mobile phones."

Year on year, the feature phone market was up 9.9%, notes the research. Feature phones continue to account for a majority share (62.2%) of the region's overall mobile phone market as they adequately address the needs of consumers that have limited purchasing power and require a reliable long-lasting mode of communication, particularly in rural areas.

"Combining smartphones and feature phones together, the overall Africa mobile phone market saw shipments of 53.7 million units in Q4 2017, which represents downturns of 0.7% QOQ and 2.6% YOY," according to IDC.

IDC further shows that 4G phones are growing in popularity, finally accounting for a majority share of the smartphone market at 56.8%. Shipments of 4G devices were up 3.9% QOQ in Q4 2017, with a drop in prices for entry-level 4G phones and an increase in the number of 4G networks across the continent driving this growth.

"Despite the push of operators towards 4G, the price differential between 3G and 4G devices together with the price sensitivity of African consumers means that many people in Africa still prefer 3G phones," says Nabila Popal, senior research manager at IDC.

Looking ahead, IDC expects Africa's overall mobile phone market to grow 0.7% in Q1 2018, with overall shipments to increase slightly through 2018, leading to YOY growth of 2% for the year as a whole.

According to point of sale tracking data from market research firm GfK SA, South African smartphone sales climbed 28% year-on-year to 3 million units in the third quarter of 2017.

"Mobile operators are on a drive to boost data usage to compensate for a steady decline in voice revenues," says Nikolay Dolgov, general manager for point of sales tracking at GfK SA.

"Falling prices of smartphones, aggressive operator promotions and growing WiFi/4G penetration are all helping to speed up the adoption of smartphones in South Africa."

According to research by Gartner, worldwide sales of smartphones recorded their first-ever decline since 2004, with sales to end users totalling nearly 408 million units in the Q4 of 2017, a 5.6% decline.

Sibahle Malinga
ITWeb's portals journalist.

Sibahle Malinga, ITWeb's portals journalist.

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