With millions of youthful adults buying their first mobile phones and handset makers introducing affordable payment options, a rise in sales of mid-range and high-end smartphones is helping drive a resurgent African market post-Covid-19.
Two industry reports project the rising uptake of smartphones in Africa over the next three years, driven by the growth of youthful users and an influx in affordable device financing plans, as mobile phones become integral in business and society.
Mobile phones kept people and businesses connected when social restrictions were introduced to curb the spread of Covid-19. Smartphones enabled remote working, learning and other aspects of life to continue with minimal disruptions, and are increasingly seen as a must-have tool for life on the continent in the 21st Century.
Over the past decade, the rise in the use of mobile phones has ignited Africa’s digital economy, which is projected to more than double to more than $200 billion by 2025 from a current $115 billion.
“As economies recover and restrictions ease, mobile technology will be even more integral to how people live and how businesses operate,” said the Global System for Mobile Communications Association (GSMA) in its 2021 mobile economy report.
The International Data Corporation (IDC) projects a 3.8 per cent annual growth in smartphone shipments in the African market in 2022, following an 11.3 per cent decline in Africa's overall mobile phone market to a total of 48.6 million units last year, on global supply shortages.
While smartphone shipments declined 7.1 per cent to 21.5 million units in 2021, IDC data shows some interesting patterns building up in the segment.
The share of smartphones with a price range of between $200 and $400 rose to 14 per cent last year, from 10.1 per cent in 2020.
“The growth in the midrange price band can be attributed to the launch of new feature-rich models by key vendors like Samsung, Xiaomi and Transsion. This price band is expected to maintain its growth momentum over the long term,” said Taher Abdel-Hameed, a senior research analyst at IDC.
Interestingly, the share of more expensive smartphone brands costing more than $400 also rose marginally, from 3.1 per cent to 4.8 per cent over the period.
Low-end smartphones valued at less than $200, a segment which dominates Africa’s smartphone market, saw its share of shipments drop to 81.1 per cent from 86.8 per cent in 2020.
PREMIUM PHONES
This trend highlights the growing popularity of premium smartphones, which come with higher specifications, including higher processing power, clearer photos and faster Internet speeds, among young African consumers.
GSMA in its Mobile Economy Sub-Saharan Africa report 2021 shows 4G–powered smartphones adoption has begun rising and will more than double from 12 per cent in 2020 to 28 per cent by 2025, on improving device affordability.
Meanwhile, 2G adoption will drop significantly to 11 per cent from the current high of 38 per cent, showing a decline in popularity of smart feature phones, as 3G (which includes most entry-level smartphones) adoption remains almost unchanged at 58 percent over the next three years.
Overall, the association projects smartphone adoption to rise from the current 48 per cent to 64 per cent of all mobile connections in sub-Saharan Africa, by 2025, driven by youthful customers in key economies.
“With more than 40 per cent of the region’s population under the age of 15, young consumers owning a mobile phone for the first time will remain the primary source of growth for the foreseeable future,” according to GSMA.
This means young consumers will form the biggest percentage of around 120 million new mobile subscribers that will be added to the market by 2025, pushing up the total number of subscribers to 615 million, or, 50 per cent of the region’s population.
SOURCES OF DEMAND
A third of the new mobile users will come from Nigeria (22 million)-the most populous nation on the continent and Ethiopia (15 million), the second most populous country in Africa.
Other countries that will contribute the most first-timer users are the Democratic Republic of Congo (DRC) with 11 million, Tanzania (7 million) Kenya (6 million) and Uganda (5 million).
Nigeria will have the highest overall number of smartphone connections at 163 million, followed by South Africa (89 million) and Kenya (52 million).
Asian smartphone brands dominate the continent, with Chinese mobile phone maker Transsion Holdings, better known for its popular Tecno, Infinix and Itel Mobile models, controlling Africa’s smartphone market with a combined unit share of 47.9 per cent.
Samsung controls 19.6 per cent and Xiaomi is at 7.1 per cent, while the rest of the market is shared by Huawei, Nokia, Oppo and realme, all battling for the bulging youth market.
Lately, there has been an increasing battle for market share, with these handset makers turning to instalment payment plans and introducing affordable models with faster processors and high Internet speeds to attract young, tech-savvy customers.
PROMISING FUTURE
In December 2021, Transsion partnered with Safaricom, Kenya’s largest telco in terms of subscriber base, to allow customers to upgrade their 2G powered phones to 4G-enabled, via a financing plan that accepts daily, weekly and monthly instalments.
In February, Nokia handset maker HMD Global introduced a device financing plan that targets its existing business partners to distribute the devices by offering credit, and earn interest in the process.
Recently, realme announced its intention to extend its ‘Go Premium Strategy’ to Kenya, following what it termed positive reception for its ‘affordable’ premium brands (which cost from under 200 to 400 US dollars) during the first quarter of 2022, especially among the youth.
“The company will maintain the momentum to produce tech-trendy premium handsets that integrate tech innovations and modern cultures for the young population with disposable income in Kenya and other markets,” said realme CEO Sky Li in a statement.
African governments and Internet service providers have also been ramping up investments in undersea cables to boost Internet speeds, lower the cost of access and meet the growing demand for cloud computing, streaming, gaming, connected devices, and customers’ demand for seamless service provision, with no interruption.
“Strong investor confidence and consumer interest in digital platforms point to a digital-centric future for sub-Saharan Africa, with mobile at the centre of the creation and consumption of innovative solutions,” according to GSMA.
**bird story agency**
