North Africa Mobile Market Sees Strong Growth as Demand for Feature Phones Surges

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The North Africa mobile phone market—comprising Egypt, Tunisia, Algeria, and Morocco—saw year-on-year shipment growth of 11.5% in Q3 2018, according to the latest insights from International Data Corporation (IDC). The global technology research and consulting firm's newly released Quarterly Mobile Phone Tracker shows overall shipments for the quarter totaled 8.2 million units, with the growth primarily being driven by rising demand for feature phones across each of the region’s country markets.

The region’s largest mobile phone market, Egypt, saw overall shipments reach 3.7 million units in Q3 2018, with smartphones accounting for 66.1% of this total. However, feature phones saw much stronger growth at 23.5% year on year, compared to just 2.6% for smartphones. "This disparity in growth rates comes as consumer purchasing power is being diminished by rising fuel and electricity prices," says Taher Abdel-Hameed, a research analyst at IDC. "The cheaper price points of feature phones are driving a surge in demand for these devices among consumers that are experiencing shrinking disposable incomes, while refresh cycles for smartphones are getting longer as consumers put off renewing their devices in this challenging economic climate."

Algeria, the region’s second-largest market, saw overall mobile phone shipments of 2.3 million units in Q3 2018, up 25.6% year on year. This growth was caused by the rapid penetration of new local vendors in the market as they looked to take advantage of government regulations restricting mobile phone imports. This regulation exempts semi-knocked devices (SKDs) that are locally assembled in the country. While smartphones represented 52.3% of the market in Q3 2018, shipments of these devices grew by just 3.1% year on year compared to 65.3% for feature phones. The focus of local brands on pushing feature phones as an entry strategy to create brand awareness and rapidly gain unit share has proven instrumental in driving this surge.

The Moroccan market remained relatively flat in Q3 2018, with overall mobile shipments totaling 1.6 million units for a modest year-on-year growth rate of 1.3%. Smartphones accounted for 65.0% of this total, but shipments of these devices declined 4.9% year on year versus an increase of 15.8% for feature phones. Tunisia saw overall shipments of 0.7 million units in Q3 2018. With 59.5% share, smartphone shipments increased 7.2% year on year, while feature phone shipments grew 18.8% despite the negative backlash caused by recent fluctuations in the Tunisian dinar.

Looking ahead, IDC expects each of the markets in this region to record single-digit growth rates for 2018 as a whole, with IDC forecasting region-wide growth of 6.2% year on year for the North Africa mobile phone market in 2018.

"The global macroeconomic slowdown has had repercussions across North Africa, a region that was already grappling with its own specific problems," said Ramazan Yavuz, a research manager at IDC. "While growth prospects do exist in the smartphone segment, brands are increasingly realizing that greater marketing and distribution spend is required as competition in the region has been raised to new heights. Even in the relatively closed Algerian market, numerous emerging brands are setting up manufacturing lines. In a similar vein, the new wave of Chinese brands will continue their aggressive expansion plans across the region."