Chinese firm realme eyes bigger smartphone market share

Plans to meet rising demand for entry level smartphones.

In Summary

•GSMA data shows the number of unique mobile subscribers will rise by 4.5 per cent to 613 million in the short term.

•Smartphone ownership is projected to grow to 61 per cent by 2025 from the current 49 percent.

realme Kenya PR and Marketing Manager, Mildred Agoya/HANDOUT
realme Kenya PR and  Marketing Manager, Mildred Agoya/HANDOUT

Demand for entry-level smartphones has begun to rise in Kenya as young consumers go for devices that offer large storage, high-speed internet, fast processor and quality camera output at a lower cost.

The burgeoning youthful customers-currently constituting the highest population of first-time mobile users is driving this demand.

In an increasingly interconnected world, there is heavy usage of internet-enabled phones by youths beyond just communication.

Tech savvy young consumers are now than ever using smartphones to shop, play games, organise events and meetings as well as a virtual classroom.

“As a result, we are seeing a surge in sales from our entry-level segment, a pointer that reflects a growing demand for functional devices that are also affordable,” realme Kenya PR and  Marketing Manager, Mildred Agoya said.

The International Data Corporation (IDC) in June, 2022 showed that feature phone shipments declined 31.6 per cent year-on-year as smartphones gained 12.7 per cent, driven by the launch of new smartphones with rich features including high-speed internet.

Smartphone shipments in Kenya now account for 72 per cent of total shipments, driven by entry-level handsets with price bands of between $100  (Sh12,346) and $200 (Sh24,693), and  mid-range of up to $450  (Sh55,559).

A pandemic-induced push for cashless transaction, contactless meetings, and migration of many businesses to online platforms including social platforms like WhatsApp and Facebook, Li said have also accelerated the shift from feature phones and helped to grow the size of entry-level smartphone market.

“We began experiencing this shift at the height of the pandemic, It is now growing bigger post-pandemic and showing no signs of stopping fuelled by the high cost of living that has significantly reduced consumer purchasing power,”said  Agoya.

According to GSMA’s The Mobile Economy Sub-Saharan Africa 2021 report, Sub-Saharan Africa with 40 per cent of its population under the age of 15, young consumers owning a mobile phone for the first time will remain the primary source of growth for entry-level smartphones.

GSMA data shows the number of unique mobile subscribers will rise by 4.5 per cent to 613 million, as smartphone ownership is projected to grow to 61 per cent by 2025 from the current 49 percent.

Rate of 4G adoption is also forecast to nearly double to 33 per cent over the period.

"realme, the youngest and fastest growing smartphone brand globally, is consistently working on its business strategy to create a favourable ecosystem for the growing young users to hop into their smartphone upgrade ladder," the firm said.

Two months ago, the brand announced a plan to increase its research and development budget  by 58 per cent to bolster technology innovation, and quality of smartphones  with designs that appeal to young customers.

“This means you can expect even more exceptional Number Series phones moving forward, as our Number Series is our essential product line, packing essential tech into a stylish package with an accessible price tag,” Agoya.

The firm's plan to increase research budget together with  “market cultivation” is a strategy to grow shipments to 1 million for each of its 15 core markets.

Already,  realme has had the first of its early wins.

On the first quarter of 2022 , it  broke its annual five million sales volume mark for the first time globally, driven by the sale of entry-level phones in Kenya and other markets.

The success is attributable to its C-series model.

realme C35 is the latest in the series to launch in the market and is the first phone in the country to feature an FHD screen.

IDC attributes affordability of entry-level smartphones to Chinese vendors, with Transsion brands – Tecno, Itel and Infinix – controlling 48 per cent of the shipments. 

The corporation places Samsung second, at 25 per cent, while another Chinese brand, Xiaomi, takes the third slot with 6.6 per cent.

“realme is also fast rising to enter this top league as we continue to work on meeting the dynamic and rising needs of the youthful market,” said  Agoya.

A comparative estimate analysis by Canalys released in November 2022 ranks realm in the fourth position with a three  percent share, after Transsion(49 per cent), Samsung(33 per cent) and Xiaomi(6 per cent).

The Q3 estimates show only realme moved up the ranks and had the largest annual growth (71 per cent) in shipments.

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