• Sunday, December 10, 2023
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Rising inflation dampens smartphone, feature phone markets in Africa

Rising inflation dampens smartphone, feature phone markets in Africa

Africa’s smartphone market declined by 3.4 percent in the first quarter (Q1) of 2023, reaching a total of 17 million units, data from the International Data Corporation (IDC) shows.

The IDC report attributes this decline to increasing inflation and local currency depreciation against the dollar, which have negatively affected the demand for smartphones across the continent.

According to the recently released Worldwide Quarterly Mobile Phone Tracker by the IDC, this figure represents the lowest level of smartphone shipments to the region since the beginning of the COVID-19 pandemic in the first quarter of 2020.

George Mbuthia, a senior research analyst at IDC, said “Africa’s smartphone market has been declining since 2022 due to weak consumer demand, and this has been worsened by rising inflation and higher device prices.”

“The average selling price (ASP) for smartphones grew QoQ due to high import costs and the fact that many vendors’ flagship devices are now equipped with 5G and have therefore moved up in price to the premium segment,” it said.

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While shipments of feature phones in Africa also declined in the first quarter of 2023, the decrease was not as significant as that of smartphones. Feature phones remain relatively affordable and continue to be the preferred secondary device for many consumers.

In the first quarter of 2023, the top three smartphone markets in Africa showed mixed performance. South Africa and Nigeria experienced a decrease in shipments, while the Egyptian market witnessed growth.

The report highlights that South Africa faced seasonal issues and weak demand, resulting in vendors being unable to introduce new units while they focused on clearing existing stock.

Although Egypt’s market is still below its full potential, local assembly efforts in the country have been increasing, and the government has removed the requirement for “letters of credit” from vendors. These developments have contributed to the market’s recovery from a low point.

Despite experiencing a decline in units, Transsion (which includes Tecno, Itel, and Infinix) held the largest share of smartphone shipments across Africa in the first quarter of 2023. Samsung ranked second, followed by Xiaomi in third place.

Ramazan Yavuz, a senior research manager at IDC, commented, “Looking ahead, we expect a slight recovery in demand to begin in the second half of 2023, as uncertainties regarding a global recession diminish.”

“Stable currency exchange rates against the dollar will promote consistent pricing and are also expected to reduce import costs, thus lowering average selling prices in the market. This, in turn, will contribute to slight growth throughout the rest of the year.”