Massive drop in smartphone shipments to South Africa

Africa’s mobile phone market started 2017 off with a big quarter-on-quarter decline, including South Africa, according to the latest figures by International Data Corporation (IDC).

The technology research and consulting firm’s newly released Quarterly Mobile Phone Tracker showed 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,” 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 Q1 2017, with Tanzania and Uganda increasing 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.

IDC said it expects Africa’s overall smartphone market to slowly rebound from its current lull to a state of growth, as smartphone prices continue to fall. 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.

Read: Huawei takes aim at South Africa’s premium smartphone market

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Massive drop in smartphone shipments to South Africa