IDC: Smartphone sales in Africa bouncing back

Heap of the different smartphones (photo: file)

NAIROBI, KENYA: Smartphone makers and vendors are betting on an increased demand of the gadgets in Africa to drive sales and grow market share this year.

Data from a global research firm International Data Corporation (IDC) indicates that smartphone sales across the continent are bouncing back, following a previous lull pushed by consumer demand.

“Africa’s smartphone market bounced back from two consecutive declines to post quarter-on-quarter growth of 4.4 per cent in the third quarter of 2017,” says IDC in a report released last week.

“Smartphone shipments for the quarter reached 21.7 million units, spurred by ongoing economic recoveries in some of the continent’s major markets although year on year, shipments went down 5.5 per cent,” says IDC.

Kenya is considered one of the leading markets for smartphones in Africa with usage rates estimated at 30 per cent of the country’s 40 million mobile subscribers. “Our research shows that 4G phones are growing in popularity, with shipments increasing 5.5 per cent in the quarter under review to finally account for a majority share of the smartphone market at 52.9 per cent” says the report.

“A drop in prices for entry-level 4G phones and an increase in the number of 4G networks across the continent are driving this growth in 4G devices.”

In December, phone vendor Redington launched the iPhone X, the latest smart phone from Apple that is currently considered the most advanced smartphone.

The new iPhone that retails from $1250 (Sh125,000) features the latest in hardware and software with hundreds of orders reportedly confirmed a few days after the launch. According to Odyssey Capital Chief Executive Eric Muli, the demand for smartphones among consumers in Kenya in the recent past has gone up, with some taking up credit facilities to acquire the devices.

“We have a young clientele that is passionate about tech, always looking to get hold of the newest iPhone, Samsung, etc. but often financial constraints limit their choices,” he explains.

The company launched a service, Lipa Later, that partners with phone vendors to provide low-interest loans for consumers to acquire devices of their choice and pay in installments.  

“Most financial institutions require collateral which is a draw-back to most people starting their first or second job or business and Lipa Later appeals to those who for the most part require technology to earn a living,” he explained.

Mr Muli says so far, the company has issued loans to 10,000 consumers with a large number of loans taken up last month largely due to the overall increase in discretionary expenditure.

Interest rates range from four and after the client pays an initial deposit of about 10 per cent, he or she is free to leave with their device and pay for it in monthly installments.

In the vending landscape, the Transsion Group, distributors of Tecno, iTel and Infinix brands, continued to lead the smartphone category taking up 30 per cent of the market share followed closely by Samsung at 26 per cent.

“The Transsion Group maintains its position by engaging in aggressive sales and marketing campaigns,” said Nabila Popal, a senior research manager at IDC.

Curiously, feature phones still account for 60 per cent of the total mobile phone market in Africa with sales driven by users in rural areas with shipments totalling 33.7 million units.