The influx of Asian brands specifically targeted for the Nigerian market is the major driver for the continuous decline in the average price of smartphone to $95 (N34,200) in 2018 from $117( N42,120) in 2016, and $216(N77,760) in 2014, according to the recently released 2019 Jumia mobile report.
From the report, Asian brands have consistently enjoyed massive patronage due to their Africa-specific strategy of introducing lower price point smartphones into the Nigerian market.
“In 2018, Fero, Samsung, Nokia, Infinix, and Tecno remained the customers’ favourites and the top selling mobile brands on Jumia. It is interesting that a one-time king of mobile phone, Nokia is gradually returning to the limelight, riding on its durability claim. Infinix continues to lead the pack, year on year,” the report further stated.
Also the availability of lower priced phones still remains the major driver of smartphone penetration as it increased by 87 percent in 2018 from 84 percent in 2017.This shows that out of an estimate of 201 million Nigerians by the United Nations Organization, there are over 172 million mobile subscribers in 2018 from 162 million in 2017.
While the number of smartphone users might have increased year-on-year, its penetration is still very insignificant.
Gbolahan Ologunro, an equity research analyst at Lagos-based CSL Stockbrokers said, “MTN has embarked on the production of smartphone and that has driven down the cost of smartphones in the market given its affordability when compared to other brands. Additionally, the production of improved or more advanced brands has been accompanied with moderation in the prices of existing brands, leading to lower prices for smartphones.”
“Most companies in the smartphone manufacturing business in a bid to incorporating technological advancement in their existing smartphones tend to release new and or upgraded brands, leading to a moderation in the market value of the existing brand as consumers shift to the usage of the newly released brand,” Ologunro further added.
Nigeria has been predicted to be among the various countries across the world that will push the total number of global mobile subscribers to 6 billion between now and 2025.
“Nigeria has been identified among these countries, with others being India, China, Pakistan, Indonesia, USA, and Brazil. It is predicted that Nigeria will contribute 4 percent of the estimated 700 million new global mobile subscribers, making it the only country in Africa marked with a significant contribution to increasing mobile penetration in the world,” “By this quota, it is expected that 28 million new mobile subscribers will emerge from Nigeria between 2019 and 2025, that is, an average of 7 million new mobile subscribers annually, if the country is to meet its quota,” the report further said.
Also from the report, the Telecommunications and Information Services, a sub-sector of the Information Communications Technology, contributed 77 percent of the sector’s contribution to the GDP. Overall, the mobile telecommunications sub-sector contributed 7.4 percent to the country’s total GDP in 2018, compared to 5.5 percent in 2017.