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SA consumers still favour low-cost feature phones, says Nokia

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 27 Jul 2021
The fourth-generation Nokia 105.
The fourth-generation Nokia 105.

Finnish cellphone brand Nokia says feature phones still make up its biggest phone category, as it continues with its drive to capture the low-cost feature phones market in SA.

During a recent webinar, HMD Global, which operates the Nokia mobile phone business, noted it still sees huge opportunity in SA’s feature phone market, as the rising unemployment rate and economic uncertainty caused by the pandemic continue to shift consumer buying patterns towards more affordable devices.

Across the continent, the basic feature phone is still the mobile phone of choice, making up more than half of the user base.

According to IDC’s Worldwide Quarterly Mobile Phone Tracker, Africa's overall mobile phone market enjoyed year-on-year growth of 14% in Q1 2021, to total 53.3 million units. The feature phone market showed great demand, growing 11.9% to 29.9 million units for the quarter.

“Feature phones are still a sizeable business for us, and certainly in terms of units sold, it’s the biggest category that we have,” said HMD Global CEO Florian Seiche.

“We remain regionally very focused on some key markets like Africa, Asia Pacific, the Middle East region and India − those are our key focus markets for feature phones. However, we do see that going forward our biggest revenue growth is certainly coming from our smartphone category.”

When HMD took over the Nokia phone brand, it reinvented the smartphone range, but maintained the existing line of feature phones.

Feature phones, with their basic functions, are significantly more affordable than smartphones, and dominate the African market. In the first three months of this year, 96.9% of the mobile phones sold were low-end or mid-range handsets customised for African consumers.

In Kenya, Nokia takes the biggest cut of the country’s feature phone market. “In SA, we are the number two biggest feature phone brand, so [the feature phone market] is still very relevant for us in our focus territories. IDC’s first quarter results had us at 27% market share,” said Justin Maier, VP of HMD Sub-Saharan Africa.

Smarter feature phones

Last year, analysts told ITWeb that smart feature phones − affordable Internet-connected devices, with low-cost data usage − will be the ones to watch out for, as feature phone users progress to internet-connected basic phones.

According to the GSM Association, mobile phone affordability remains a primary challenge to internet adoption and data consumption across emerging markets such as Africa and India, and accelerating affordable lower-end smartphone ownership prompts the first step in the journey of internet adoption.

The trend has seen MTN and Vodacom partnering with KaiOS Technologies, maker of the KaiOS operating system, to produce smart feature phones.

HMD says it has been observing the trend towards the migration to smart feature phones, so it introduced the C-series range, to provide feature phone customers with the opportunity to upgrade to an affordable smartphone.

“While we see a strong continued demand for feature phones, you have to look at the fact that we have such a big install base – literally hundreds of millions of feature phone customers,” noted Seiche.

“There is an increasing percentage of those that are looking at a smartphone as their next phone, and we have been seeing that happening with the introduction of our C-series. And that’s why we are very excited to give our feature phones customers an opportunity of owning a smartphone.”

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