More than half of all smartphones sold in Africa in the all-important fourth quarter of 2019 cost the owner less than $100 and was more than likely made in China.
Smartphone shipments to Africa were up by 5.4% to 24.4 million units during the busy Black Friday/Christmas holiday season, according to data from IDC. Feature phone shipments dipped by 2.6% down to 34.4 million units or 58.4% market share still dominating the continent due to their affordability.
Smartphone shipments were led by Shenzhen, China maker, Transsion, which has three brands (Tecno, Infinix and iTel) which combined had a 40.6% market share while Samsung came in second with 18.6% and Huawei with 9.8%. Transsion’s brands completely dominate the feature phone segment with 69.5% while HMD (Nokia) has 10.2%.
As phone networks are upgraded across the continent, social media rises in popularity and, in some countries, mobile internet access becomes more affordable, there is a growing demand for smartphones.
But for a continent where many of the urban middle class earn less than $500 a month, spending $200 or $300 on a smartphone is a significant commitment. This is why Chinese makers including Transsion, Huawei and BBK (Oppo brand) have quickly dominated the rapid growth in smartphones in Africa as they are able to make and market phones at price points under $100. In South Africa, local brand Mobicel has also done well with smartphone models from as low as 500 rands ($30).
These new, cheaper models helped the market share of smartphones priced under $100 rise to 51.2% in the fourth quarter from 46.8% for the same quarter in 2018. Smartphones priced under-$200 accounted for 83.2% of all smartphones shipped in the period.
Transsion in particular has been aggressive in targeting African consumers by offering advanced tech features at much lower price tickets than brands like Samsung. It has also made its brands some of the best known in cities from Lagos to Nairobi through major advertising and branding campaigns on a variety of media platforms.
On the back of its success in Africa’s major markets, Transsion, which does not market phones in China, launched a successful $6.5 billion initial public offering on Shanghai stock exchange’s Star market last September.
Screenshot of ad campaign
Overall, phone shipments in Africa were up 3.8% for the fourth quarter of 2019. Mobile phone shipments to South Africa and Nigeria, the continent’s biggest markets, rose 2% and 5.2% year over year.
But even after a strong 2019, IDC forecasts an 8.4% contraction in phone shipments in Africa to 48.7 million units for the first quarter of 2020 due to the unprecedented economic impact of the global coronavirus pandemic.
“The closure of factories in China following the COVID-19 outbreak has severely disrupted the supply chain for components used in the production of smartphones,” says Ramazan Yavuz, a research manager at IDC. “The fallout from the COVID-19 outbreak is compounding existing local and macroeconomic challenges across Africa.”
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Rising smartphone sales in Africa to fall with coronavirus crisis - Quartz Africa
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