Feature phone shipments into Africa pull ahead of smartphones in 2016
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Refurbished PCs and grey channel increase penetration into Nigeria systems market tracking it in Q1 2008 , with factors such as unstable exchange rates , poor economic performance , and the steady rise of refurbished gray market imports causing a decline that has been ongoing since 2013 .
Babatunde Afolayan , Senior Research Analyst at IDC West Africa .
The import of refurbished PCs , primarily from the UAE , UK , China , is proving particularly challenging for official channels , with such products comfortably outnumbering official shipments of primary PCs . “ At the same time , the volume of gray market imports is steadily increasing ,” says Babatunde Afolayan , Senior Research Analyst at IDC West Africa . “ One of the main reasons is the lower price points at which resellers can purchase products from gray market sources , giving them better profit margins than official channels .”
The government is continuously trying to improve the country ’ s economic performance and has implemented various strategies aimed at increasing the purchasing power of end users . Meanwhile , the Central Bank of Nigeria is considering the inclusion of IT products for interbank rates when it comes to accessing foreign currencies . IDC forecasts that this relatively flat growth in 2017 will be followed by a much stronger YoY increase of 59.9 % in 2018 .
Official PC shipments to Nigeria have fallen 57.1 % YoY in 2016 to total 156,511 units , according to the latest figures compiled by IDC . This means the market has now fallen to its lowest levels since IDC started
Nigeria ’ s currency , the Naira , has been losing considerable value against the US dollar for a number of years now . To make matters worse , the government excluded IT products from accessing foreign currencies at the interbank rate , pushing channel partners to obtain foreign currencies from the unofficial market , where rates are typically 40 – 50 % higher .
Both commercial and consumer end users have been prolonging their PC lifecycles beyond what is generally considered normal . And in cases where new purchases are being made , commercial end users are typically opting for cheaper models while consumers are increasingly opting for refurbished products . An additional challenge is that channel partners are no longer stocking units to meet future demand ; PCs are now ordered on a needto-supply basis , and only after orders have been fully paid .
Feature phone shipments into Africa pull ahead of smartphones in 2016
Africa ’ s smartphone revolution is showing signs of a slowdown according to the latest figures compiled by IDC . The research firm says the continent ’ s smartphone market totaled 95.37 million units in 2016 . And while this is up 3.4 % YoY , it represents a considerable deceleration from the double-digit growth rates seen in the previous two years , with demand being hampered by the currency fluctuations that are affecting the continent .
Overall , 215.33 million mobile handsets were shipped in Africa during 2016 , up 10.1 % on the previous year . However , it was feature phones that were largely responsible for this growth , with shipments increasing 16.1 % YoY in 2016 to total 119.97 million units . This growth saw feature phones increase their unit share of Africa ’ s overall handset market from 53 % in 2015 to 56 % in 2016 .
“ Africa has always been a tough market for mobile phone companies to crack , and in 2016 that challenge got even harder ,” says Simon Baker , Programme Director for Mobile Devices at IDC CEMA . “ Many African economies struggled throughout 2016 , and this had an inevitable knock-on effect on the smartphone market , which had previously experienced a very strong 2015 . It was a particularly tough year in Nigeria , with the devaluation
Simon Baker , Programme Director for Mobile Devices at IDC CEMA . of the Naira causing a drop-in confidence in the distribution channel . And while North African markets saw an increase in overall handset shipments in 2016 , the pace of growth slowed YoY due to exchange-rate fluctuations in Egypt and security issues in Algeria .”
Samsung continued to lead the
African smartphone market in 2016 , largely through a reworked product portfolio that now includes more mid to low range models . However , at 28 million units , its 2016 smartphone shipments in Africa showed little growth from the figures recorded in 2015 . The second-placed smartphone vendor was Transsion , widely known throughout Africa via its itel , Infinix , and Tecno brands . And in terms of feature phone shipments , Transsion comfortably outperformed its main competitors in 2016 .
Chinese vendors have been showing more interest in the African market in recent quarters and expanding into new countries . However , this expansion strategy is delivering mixed results across the continent . Of the big international Chinese vendors , Huawei posted YoY shipment growth to remain as Africa ’ s number-three smartphone vendor in 2016 , while Lenovo saw flat growth and ZTE and Alcatel both suffered slight declines .
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