Economic conditions hit African mobile phone shipments hard

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Africans are buying cheaper mobile phones and holding on to them for longer according to the International Data Corporation’s (IDC) Quarterly Mobile Phone Tracker.

The IDC found that in Q1 2018 mobile phone shipments (including smart and feature phones) to Africa declined 6.3 percent quarter on quarter.

This decline has largely been attributed to lower shipment figures in Nigeria and South Africa – Africa’s two largest mobile phone markets. Shipments to South Africa declined 27.4 percent quarter on quarter while in Nigeria that figure was lower at 6.4 percent.

The IDC says that in South Africa this decline is to be expected since many locals buy phones during the fourth quarter. This makes sense because by the end of the year most manufacturers have announced their offerings and the festive season brings with it a spending rush for those offerings.

“With disposable income limited for the majority of consumers, most spending on mobile devices takes place in Q4, leading to an inevitable drop-off in Q1,” senior research manager at IDC, Nabila Popal said.

That mention of limited disposable income is also rather important because South Africans are buying more low-end to midrange smartphones. Overall, smartphone shipments declined 4.5 percent quarter on quarter.

Tough economic conditions are also starting to have a negative impact on the smartphone market. The IDC notes that feature phones have become more prominent on the African continent due to dwindling smartphone shipments. Feature phone shipments were also down 7.4 percent quarter on quarter, suggesting folks are holding on to feature phones for longer but even when buying a new phone it seems more likely to be a low-cost feature phone than the iPhone X.

“Feature phones remain a viable option throughout the continent as hardening economic conditions have taken their toll on consumer spending,” says IDC research manager Ramazan Yavuz. “The volatile exchange rates that have afflicted many countries across the region are delaying the penetration of affordable smartphones into wider segments of the consumer base, which is why we continue to see feature phones account for such a large share of the overall market.”

This downward trend is expected to continue throughout 2018 with mobile phone shipments expected to decline 0.6 percent year on year.

For local brands, this represents an opportunity, says Yavuz. “The local brands that are equipped with a strong knowledge of local needs and the flexibility to adjust mobile phone prices locally will strongly appeal to African consumers, and their growth will accelerate the uptake of smartphones in the mid-term,” he concludes.

[Image – CC BY 2.0 Albertas Agejevas]


Brendyn Lotz

Brendyn Lotz

Brendyn Lotz writes news, reviews, and opinion pieces for Hypertext. His interests include SMEs, innovation on the African continent, cybersecurity, blockchain, games, geek culture and YouTube.