Africa's mobile phone market started 2017 off with a drastic
quarter-on-quarter (QoQ) decline according to the latest figures announced
today by International Data Corporation (IDC).
The global technology research
and consulting firm's newly released Quarterly Mobile Phone Tracker shows
that overall shipments for the first quarter of the year in Africa totaled 54.5
million units, down -8.2% on Q4 2016.
The prime driver of this downturn was a
stark -17.6% 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%, 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%), Nigeria (-8.1%), and Egypt (-11.5%). "In South
Africa, the drop was mainly due to high levels of stock in the channel from
previous quarters," says 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 smartphone markets in Morocco and Algeria also performed
poorly in Q1 2017, although the QoQ declines were much less drastic at -2.2%
and -1.5%, respectively.
"Morocco's economy was significantly impacted by
a stalemate in the government that is delaying the disbursement of budgetary
funds, while Algeria's unstable politics continue to dampen consumers'
willingness to make discretionary purchases," says Soufiane Bouhaji, a
research analyst at IDC. "Tunisia was the only market in North Africa to
record a QoQ increase in smartphone shipments (0.5%) in Q1 2017 and that was
mainly due to the country's healthier macroeconomic environment."
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% and 11.6%, 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 % QoQ.
In terms of vendor rankings, Samsung remains the continent's
leading smartphone vendor, with 29.8% 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% 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.
"IDC expects Africa's overall smartphone market to
slowly rebound from its current lull to a state of growth," says Bouhaji.
"Despite the tough macroeconomic conditions currently inhibiting much of
the region, smartphone prices continue to fall and this will drive their
adoption across Africa. Almost 40% of all smartphones shipped in Africa in Q1
2017 were priced below $80, up from 28% just two years earlier. Mobile data
charges are also becoming more affordable, while increasing use of
video-sharing applications and improving penetration of over-the-top services
are further encouraging smartphone adoption."
IDC is forecasting that Africa's smartphone shipments will
remain flat this year, but for growth to resume in 2018 as the economy
gradually recovers.
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