SA handset sales to hit R23 billion in 2013

Handset sales in South Africa are projected to reach US$2.3 billion (R23 billion) in 2013, up 13% from US$2.1 billion (R21 billion) in 2012, with smartphones the main revenue growth driver, according to new research.

According to research conducted by Fast Market Research, increasing smartphone adoption is a key element of South African mobile operator strategy.

“Various applications and content will drive demand for higher-tier handsets. Around four million of South Africa’s 10.5 million data users are understood to be using smartphones with full features, according to operator estimates,” it said.

In February, Vodacom pointed to a 27.2% rise in equipment revenue from smartphone and tablet sales for the quarter ended December 2013. The company then said in May that it had six million smartphones on its network in South Africa.

Rival operator, MTN South Africa meanwhile, said it sold 6.7 million prepaid phones and 1.3 million post-paid phones in reporting its results for the year ended December 2012.

Fast Market Research, an online aggregator and distributor of market research and business information, said that South Africa’s consumer electronics market in 2013, is expected to grow at 11.4%.

“This will be driven by relatively strong private consumption growth, at 3.2% in 2013, increased spending on big ticket items such as PCs and notebooks, and the rising demand for smartphones on the back of rapid 3G and 4G network roll-out and declining data tariffs,” it said.

Computer hardware sales

The research group expects computer hardware sales to grow 12%, from US$5.4 billion (R54 billion) in 2012 to US$6.1 billion (R61 billion) in 2013, with the introduction of new products by traditional PC vendors sustaining demand for notebooks.

AV sales are expected to rise 9% to US$1.6 billion (R16 billion) in 2013, with flat-screen TV sets expected to provide the most dynamic development.

“We expect rising penetration of consumer electronics devices such as smartphones and flat-screen TV sets. However, a large grey market and limited internet access outside major cities and towns pose downside risks to growth,” Fast Market Research said.

Government spend

The research firm noted that the South African Department of Education announced a target to roll-out laptops to all schoolchildren in the country by 2014.

“The government is looking at various ways to achieve this, including the use of portable mobile computer labs for schools where there is no infrastructure. Following a strong recovery in PC shipments in 2011, the market should remain on an upwards trajectory,” it said.

South Africa continues to lag not only in terms of its own previous targets for digital migration, but also other countries in Africa have surpassed it in the switchover from analogue to digital broadcasting, Fast Market Research said.

The group pointed out that the October 2012 date for the switch-on was missed. With only two years left until South Africa’s deadline for digital broadcasting migration, this should be a driver for sales.

Vendors will focus on high-growth, new product categories such as internet-enabled TV sets and 3D TV, Fast Market Research said.

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SA handset sales to hit R23 billion in 2013