Phone Shipment: Despite Nigeria’s Strong Performance, Africa Still on Decline

IDCNigeria’s 27  percent increase in mobile phone shipment in Q4 2017 could not save Africa’s smartphone market from a quarter-on-quarter (QoQ) decline of 6.4  percent during Q4 2017 review by global research and market analytics firm, International Data Corporation (IDC).

In the latest insight published by the firm in its Quarterly Mobile Phone Tracker, it notes that smartphone shipments were down to 20.3 million units for the quarter. Year on year (YoY), this represents an 18.0  percent decline, meaning the YoY improvement seen in the previous quarter did not extend to the year’s final but traditionally strongest quarter.

In the feature phone space, shipments totaled 33.4 million units, up 3.1 percent QoQ after decreasing in the previous quarter. Year on year, the feature phone market was up 9.9 percent. Feature phones continue to account for a majority share (62.2 percent) of the region’s overall mobile phone market as they adequately address the needs of consumers that have limited purchasing power and require a reliable long-lasting mode of communication, particularly in rural areas.

Combining smartphones and feature phones together, the overall Africa mobile phone market saw shipments of 53.7 million units in Q4 2017, which represents downturns of 0.7 percent QoQ and 2.6 percent YoY. The continent’s two biggest markets saw extremely strong growth, with shipments up 19.9 percent QoQ in Nigeria and 27.0 percent QoQ in South Africa. North Africa also experienced a slight increase, although there were declines across most other markets, which explains the region’s overall decline.

A research manager at IDC, Ramazan Yavuz explains the surge in Nigeria and South Africa, “Major campaigns took place around Black Friday and during the lead up to Christmas, which positively impacted consumer spending in Nigeria and South Africa. While Nigeria continues to recover from recession and consumer spending is on the rise, there are also clear signs of improvement in South Africa. The end to the political crisis means that challenging economic conditions will be addressed as a priority by the new government, which will have a positive effect on consumer confidence and spending on mobile phones.”

IDC’s research shows that 4G phones are growing in popularity, finally accounting for a majority share of the smartphone market at 56.8 percent. Shipments of 4G devices were up 3.9 percent QoQ in Q4 2017, with a drop in prices for entry-level 4G phones and an increase in the number of 4G networks across the continent driving this growth. “Despite the push of operators towards 4G, the price differential between 3G and 4G devices together with the price sensitivity of African consumers means that many people in Africa still prefer 3G phones,” says a senior research manager at IDC Nabila Popal.

Looking ahead, IDC expects Africa’s overall mobile phone market to grow 0.7 percent QoQ in Q1 2018, with overall shipments to increase slightly through 2018, leading to YoY growth of 2.0 percent for the year as a whole. Demand for feature phones is expected to remain strong, although IDC expects vendors to drive smartphone uptake by offering more features in affordable price bands.

 

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