The signs were there, from the ever-increasing inflation since the start of the year, high dollar exchange rates and the increasing cost of living, the African mobile market had everything stacked against it and the result was only ever going to be one, a significant drop in the demand for new mobile phones.
Newly released data from IDC’s Worldwide Quarterly Mobile Phone Tracker paints a grim picture, showing that the overall market for mobile phones in Africa suffered a year-on-year decline of 19.9% in Q3 2022 representing 42.2 million units shipped down from 52.68 million units in the same period last year.
Breaking it down, IDC states that the feature phone market was down 20.1% Year on Year to 24.4 million units while the smartphone shipments declined to 19.8% to 17.8 million units, which is extremely low for smartphone volume for the whole continent.
No country in the continent saw an increase in demand for mobile phones, with the two biggest markets, South Africa and Nigeria, falling 16.2% and 21.1% respectively. “The declines seen across the continent were caused by an overall slow economy, high inflation rates, higher dollar exchange rates, and the increasing cost of living… All of these factors contributed to a slowdown in demand, which in turn forced most of the vendors to cut their shipments into African markets,” explains Taher Abdel-Hameed, a senior research analyst at IDC.
Egypt, in particular, had more issues to deal with, as their government introduced new regulations around imports which led to a 73.4% year-on-year drop in the smartphone market for the North African country.
“The Egyptian government has introduced several restrictions on mobile phone imports, these restrictions — which include requirements for all import payments to be conducted via letters of credit (LCs) and for all LCs to be approved by the central bank, with limited approvals granted so far — have caused a huge dip in the market,” adds Abdel-Hameed.
As has been the case for Africa in recent years, Transsion brands, i.e. Tecno, Infinix and Itel continued to lead the smartphone market in Q3 with a combined market share of 47.4% followed by Samsung and Xiaomi with respective shares of 25.9% and 6.4%. This is also the case in the feature phone market with Transsion brands having 79.1% of the market share whereas Nokia in second place has 6.1%
The majority of Africans continue to spend less than $100 on new smartphone purchases, with this price range accounting for 42% of all shipments, while the $100 to $200 price bracket came in a close second, accounting for 41.6% of the shipments. The midrange bracket ($200 to $400), comes in third with 11.6% of the market share as the high-end market ($400+) as expected has the lowest market share at 4.8%
With the market performing so poorly in Q3 2022, you might think that this situation will carry over to the new year. However, IDC expects that the African smartphone market will grow 8.8% in unit terms in 2023. “While 2022 has been a year of a downturn in the African smartphone market, especially with Egypt undergoing a challenging period, a return to growth is expected in 2023. This growth will be spurred by a recovery in the Egyptian market and an influx of more affordable models to offset declining consumer disposable income in most countries across the region,” explains Ramazan Yavuz, senior researcher at IDC
