Global chip shortages occasioned by pandemic response hurt Africa’s smartphone market growth – IDC

The onset of the COVID-19 pandemic last year had several effects that the world is still recovering from up to now, almost 2 years since the first case of the novel Coronavirus was detected in China.

The global supply chain’s reaction to the pandemic was to contract the manufacturing and distribution of various components critical in several industrial processes, including the manufacture of smartphones.

This was occasioned by orders put on hold by companies fearful of what the future held. In the ensuing melee, various component makers responded by shifting attention to other industries that needed what they already had in the pipeline and reduced the making of more until the world recovered. As the recovery kicked in, following the opening up of various economies as the administration of vaccines kicked off around the world and containment measures seemed to bear some fruit, it became apparent that the supply of chipsets, critical components in any computing device, wasn’t going to pick up and match pre-pandemic levels any time soon.

As the chip shortage continues to bite globally – and this is why you still can’t buy a PlayStation 5, if you’ve been eyeing one – its effect on the African smartphone market are becoming clear.

According to research firm IDC, the continental smartphone market saw shipments decline by 2.3% quarter-on-quarter in the last quarter (Q3).

While that was so, the biggest beneficiary of the dip in smartphone shipments appears to be another phone segment: feature phones. According to the IDC, feature phone shipments increased by 14.2% quarter-on-quarter.

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“With smartphone prices remaining relatively high and only expected to increase over the coming following quarters, the affordable prices of feature phones make these devices extremely attractive.”

This is even as the pricing of smartphones on the continent marginally fell (by 0.7%) in the said quarter as a result of the introduction of affordable entry-level smartphones.

The sub-$100 smartphone price segment remains the most popular on the continent with shipments of devices in that segment rising by about 6% in Q3 2021. Contrast that to smartphones in the $100-$200 segment whose shipments dipped by a whopping 14%.

Another effect of the pandemic has been the general erosion of income sources for many which has led to there being less money to spend on things like smartphones, as can be seen in the numbers.

“Transsion brands (Tecno, Itel, and Infinix) led the African smartphone market in Q3 2021 with a unit share of 47.4%, maintaining stable shipments into the region. Samsung placed second with 21.3% share, while Xiaomi — which experienced a QoQ decline in shipments — placed third with 6.1% share.”

According to the IDC, 81% of all smartphones shipped to the continent in Q3 were 4G-ready with 3G-only devices accounting for about 16%. Only about 3% of all smartphones shipped were 5G-ready, though, showing how the continent has lagged behind in 5G networks rollout.

While things may have been a bit bleak in the last quarter, the IDC projects that the smartphone market will recover this quarter (Q4) with shipments expected to rise by 7.6% courtesy of the just-ended Black Friday promotions and sales driven by the upcoming festive season.

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