Challenging macroeconomic conditions cause downturn in Africa’s mobile phone market
Africa’s mobile phone market started 2017 off with a drastic quarter-on-quarter (QoQ) decline according to the latest figures announced by International Data Corporation (IDC). The newly released Quarterly Mobile Phone Tracker shows that overall shipments for the first quarter of the year in Africa totalled 54.5 million units, down 8.2 per cent on Q4 2016. The prime driver of this downturn was a stark 17.6 per cent decline in the smartphone segment, with shipments falling from 25.8 million units in Q4 2016 to 21.2 million units in Q1 2017.
When viewed year on year (YoY), the overall mobile market was up 8.4 per cent, primarily due to feature phone shipments growing from 26.6 million units in Q1 2016 to 33.3 million units in Q1 2017. Feature phones have now been rising as a proportion of the total market for more than a year, which highlights the continuing importance of basic mobile communications in many parts of Africa, particularly in rural areas.
The drop in smartphone shipments in Q1 2017 was caused by substantial QoQ declines in the continent’s three largest smartphone markets – South Africa (-13.6 per cent), Nigeria (-8.1 per cent) and Egypt (-11.5 per cent). “In South Africa, the drop was mainly due to high levels of stock in the channel from previous quarters,” said Nabila Popal, a Senior Research Manager at IDC. “Nigeria’s decline was caused by the ongoing recession in the overall economy as well as difficulties in accessing foreign currencies for imports, while continuing exchange-rate difficulties were also behind the major decline seen in Egypt.”
The East African markets performed stronger than any other region in Africa in terms of smartphone shipments for Q1 2017, with Tanzania and Uganda seeing substantial QoQ increases of 8.1 per cent and 11.6 per cent respectively. The Kenyan market, which has seen big gains in smartphone shipments over the last two years, was more subdued in Q1 2017, with shipments declining slightly by 1.3 per cent QoQ.
In terms of vendor rankings, Samsung remains the continent’s leading smartphone vendor, with 29.8 per cent share in Q1 2017, up on the previous two quarters but slightly down on Q1 2016. Its big rival in Africa, the China-based Transsion group, took second place with 23.9 per cent share of the smartphone market, thanks to its diversified portfolio of mid-range phones and strong focus on the ˂$150 price segment. In the feature phone space, however, it is Transsion that dominates not Samsung, with its Tecno and itel brands accounting for three out of every five feature phones shipped across the continent in Q1 2017.