Africa's smartphone market experienced a quarter-on-quarter (QoQ) decline of 6.4% during Q4 2017, according to the latest insights announced by International Data Corporation (IDC).
The global technology research and consulting firm's Quarterly Mobile Phone Tracker shows smartphone shipments were down to 20.3 million units for the quarter. Year on year (YoY), this represents an 18.0% decline, meaning the YoY improvement seen in the previous quarter did not extend to the year's final – and traditionally strongest – quarter.
In the feature phone space, shipments totalled 33.4 million units, up 3.1% QoQ after decreasing in the previous quarter. Year on year, the feature phone market was up 9.9%. Feature phones continue to account for a majority share (62.2%) 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% QoQ and 2.6% YoY, the IDC stated.
The continent's two biggest markets saw extremely strong growth, with shipments up 19.9% QoQ in Nigeria and 27.0% 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.
"Major campaigns took place around Black Friday and during the lead up to Christmas, which positively impacted consumer spending in Nigeria and South Africa," says Ramazan Yavuz, a research manager at IDC. "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."
In terms of the vendor landscape, Transsion brands continued to lead the smartphone category in Q4 2017 with 30.4% share, followed closely by Samsung on 27.0%. "The Transsion Group maintains its top position by designing attractively priced devices that address the specific needs of each local market - a strategy the group proudly refers to as its 'glocal' approach," says Nabila Popal, a senior research manager at IDC.
"Despite the significant presence of Transsion brands in most African markets, it is important to note the increasing prevalence of local brands that are gaining considerable share in their home markets and slowly expanding to surrounding countries." In the feature phone space, Tecno and itel – both of which are Transsion brands – continued to dominate in Q4 2017 with a combined share of 57.2%.
IDC's research shows that 4G phones are growing in popularity, finally accounting for a majority share of the smartphone market at 56.8%. Shipments of 4G devices were up 3.9% 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 Popal.
In February analysts from Counterpoint Research said they expected Nigeria's smartphone market to grow "in double digits" in 2018, driven by the entry of new players and changing OEM strategies.
According to analysis firm's Market Monitor research focused on the Nigerian handset market, the feature phone market grew 15% annually, offsetting the smartphone decline in 2017, due to a recent economic recession.
Looking ahead, IDC expects Africa's overall mobile phone market to grow 0.7% QoQ in Q1 2018, with overall shipments to increase slightly through 2018, leading to YoY growth of 2.0% 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.
Dominique Friedl, Head of Corporate Sales for South and Sub Saharan Africa at fabless semiconductor company MediaTek agrees with the notion that the way Africans use their smartphones has evolved.
"Today, end-users expect innovation and invention from every smartphone, regardless of price. Call it the new premium - the expectation that every device will deliver flagship-quality technology, performance and experiences in an affordable package. Mid-tier smartphones are recognised as the new premium, meaning exciting technology growth is happening here and not at the high-end."
The GSMA Mobile Economy report for Sub-Saharan Africa, published in July 2017, found that the region accounts for nearly a tenth of the global mobile subscriber base and is expected to grow faster than every other region over the next five years.