Africa's Mobile Market Remains Flat as Smartphone Shipments Drop

Estimated reading time: 3 minutes

Africa's overall mobile phone market remained flat in Q1 2018 although smartphone shipments declined for the second successive quarter, according to the latest insights from International Data Corporation (IDC). The global technology research and consulting firm's recently published Quarterly Mobile Phone Trackershows that a total of 52.1 million mobile phones were shipped in Q1 2018, down 6.3% quarter on quarter (QoQ) and 3.9% year on year (YoY), with the continent's two biggest markets – Nigeria and South Africa – underperforming and posting QoQ declines of 6.4% and 27.4%, respectively.

"Nigeria's modest performance can be attributed to the fact that smartphone adoption continues to be hindered by expensive broadband rates and slow internet connectivity," says Nabila Popal, a senior research manager at IDC. "The drop in South Africa is simply down to seasonal factors, with Q1 traditionally being the slowest quarter of the year and unable to match the buoyant sales seen in Q4, traditionally the strongest, when demand is stirred by Black Friday and the Christmas season.

"While South Africa is one of the continent's most developed markets, a large proportion of the market still centers around low-end to midrange devices priced below $150. Affordable smartphones that fall into this price range have seen a lot of growth over the last two years, fueled by local brands like Mobicell, MINT, and Vodacom. 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."

Looking at smartphones in isolation, shipments declined 4.5% QoQ for the first quarter of the year to total 20.4 million units. This represents a decline of 4.4% YoY, which is actually an improvement on the 13.7% YoY decline seen in Q4 2017. Transsion brands continued to lead the smartphone category in Q1 2018 with 32.1% share of the market's shipments, followed by Samsung in second place with 25.4% share.

In the feature phone space, shipments totaled 31.7 million units in Q1 2018, down 7.4% QoQ and 3.6% YoY. Feature phones continue to account for the majority share (60.8%) of Africa's overall mobile phone market and their resilience in this region can be attributed to factors such as their affordability and long battery lives. Telco and Itel continued to dominate Africa's feature phone market in Q1 2018 with a combined unit share of 57.8%.

"Feature phones remain a viable option throughout the continent as hardening economic conditions have taken their toll on consumer spending," says Ramazan Yavuz, a research manager at IDC. "The volatile exchange rates that have inflicted 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."

Looking ahead, IDC expects Africa's overall mobile phone market to grow 0.5% QoQ in Q2 2018, while shipments for 2018 as a whole are forecast to decline 0.6% YoY. Demand for feature phones is expected to remain strong, although IDC expects vendors to drive smartphone uptake by offering more features in affordable price bands. "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," says Yavuz.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. To learn more about IDC, please click here.