Smartphone sales in the Middle East and Africa region have reportedly dropped by 3.7% year-over-year in Q1 2022 according to the latest data from research firm Counterpoint Research. Their report notes that although the first quarter of the year is normally slow in terms of sales, the demand for smartphones was also dented by geopolitical worries elsewhere and an increase in pressure on consumers due to commodity and food price increases.
Senior Research Analyst Yang Wang explains that although most manufacturers saw sales drop YoY, their performance needs to be looked at in the context of the economic reopening in Q1 2021 after the COVID-19 lockdowns, which resulted in higher than normal sales for that quarter.
Despite Samsung experiencing sales and market share losses for Q1 2022, Yang Wang says that this still presents an optimistic performance for the South Korean company than the numbers suggest.
This is because despite facing the lingering effects of supply issues, the affordable Galaxy A Series from Samsung proved to be widely popular in the region. Couple this with the other manufacturers not having a reliable supply chain and product mix, Yang Wang believes Samsung is perfectly positioned to take more market share from rivals in the next few quarters.
Transsion brands (itel, Tecno and Infinix) saw their market share increase by 1% from 28% to 29% in Q1 2022. They, however, also saw a sales drop of 7.5% YoY during the quarter which was remarkably their first sales drop since the beginning of the COVID-19 pandemic.
The downturn in performance by Transsion has been attributed to Itel, which is a brand that heavily focuses on the very entry-level devices targeting lower-income customers.
Infinix on the other hand showed positive growth thanks to its Hot and Smart series. Yang Wang, however, believes that Transsion Group is not in a good place, and he worries demand for their products is dwindling. The senior researcher also mentions that Transsion’s local currency depreciation might be a hindrance for the company to being competitive in price.
Xiaomi and Oppo are singled out for facing serious supply chain issues since the second half of 2021, but Yang Wang notes the two companies bounced back resiliently for Q1 2022, and he also says that he expects their market share retreat to bottom out during the middle of the year.
While smartphone growth has slowed across the MEA (the Middle East and Africa) region, the Middle East market managed to grow while the African one has underperformed since the second half of 2021.
The Middle East is the exception here, as most of its member countries have benefitted from increased oil revenues since the start of the Russia-Ukraine war. The region’s smartphone market is therefore expected to be the outperformer for the rest of 2022.
On the other hand, the underperformance in Africa is expected to go on for the rest of the year, as food price increases mean consumers will not be willing to spend big on big-ticket items like smartphones.
Once the current situation passes, Counterpoint Research expects the African market to recover and be driven forward by the increasing urbanization of the region, digitization of different sectors and general adoption of smartphones by the population.