Handheld devices

The fast-changing cost of connectivity

The potential of smartphones in the African market is vast. But are pricing and availability going to make things difficult for the consumer? Ron Murphy discussed the state of the mobile devices market in Africa with Arnold Ponela of IDC.

IN AUGUST A news item from analysts at IDC* entitled Africa's Smartphone Market Declines for Fifth Consecutive Quarter Due to Global Supply Shortages and Slowing Demand appeared. It was based on trends uncovered by the latest edition of the company’s Quarterly Global Mobile Phone Tracker.

We asked Arnold Ponela, an IDC research analyst for mobile devices and image printing and document solutions (IPDS) in South Africa and sub-Saharan Africa, to assess the present state of the mobile devices market in Africa.

Of course, regular readers know that we often see new announcements about affordable devices for Africa, but are they really affordable? Ponela suggested that some are. “The devices are affordable to cashstrapped consumers in Africa –with some entry-level smartphones costing around US$25,” he said. In fact, he added, “During the first half of 2022, the African market was dominated by devices that cost less than US$100, which constituted about 38.8% of the total market. These affordable smartphones are contributing to bringing more people online across Africa.”

As for where would-be manufacturers should be aiming in price terms, he reiterated that the market has been driven by entrylevel smartphones and mid-range phones which have made it possible for many people to own a smartphone. “Therefore,” he continued, “to penetrate the African market most manufacturers are targeting the less than US$200 segment which represented about 81% of the market in H1 2022.”

It's true to say demand is still high but is there availability? “Despite the African market still being dominated by feature phones, the need for devices that connect them to the internet has seen consumers migrating from basic and feature phones to smartphones.” Again the increasing number of smartphone models priced under the US$100 mark will be the main driver of this consumer migration.

In case you were wondering how to define these phones, Ponela said, “A feature phone is a device that runs a proprietary or real-time operating system (RTOS), and the devices are designed to perform phone calls and SMS and nothing more. On the other hand, smartphones contain a high-level operating system such as Android. When it’s an entry-level smartphone it has smaller memory and lower storage capacity with few of the advanced features of a mid- or high-end phone.”

And what do end users want? Do younger, tech-savvy users – and Africa has a very young population – want feature-rich devices?

“African consumers are shifting their buying patterns towards affordable and feature-rich products. Some of the features that consumers are looking for include larger screens, large memory and storage capacity.”

That’s the good news, but how much of a problem is component supply? Will that ease?

Apparently not for a while, said Ponela. “Supply chain issues have hampered the production of smartphones. Logistical and operational issues such as production capacity have added to the situation and most original equipment manufacturers (OEMs) are seeing inventory shortfalls. The problem is set to continue throughout 2022.”

Meanwhile the potential switchoff of 2G and 3G in some regions may not have a major influence on buying trends. As Ponela said, “We are already seeing a growing number of 4G feature phones.” However, he added, “The only challenge is that some of these devices cost more than an entrylevel device. For instance, the Nokia 2720 Flip feature phone cost around US$70, whereas the itel A13, which is an entry-level smartphone, cost US$25. Consumers would rather buy a smartphone in this case.”

As and when supply chain issues ease this could prove a very interesting market indeed. ✆

During the first half of 2022, the African market was dominated by devices that cost less than US$100

Photo: Adobe Stock

International Data Corporation (IDC) is a global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. www.idc.com