…competition radically lowing price of smartphones ownership
By Alex Chiejina (With Agency Report)
LAGOS (Sundiata Post) – Asian brands are gradually becoming key brands in Africa and taking over smartphone distribution in Africa, according to Jumia second White paper on African Mobile Trends 2016 released recently. The report reveal that Chinese brand Infinix understood how to make a big entrance in Africa by conquering the online sales world and partnering with online shops across several African countries.
“This online bet has been working pretty well for the Chinese manufacturer. Indeed, it is the biggest smartphone seller on e-commerce Jumia in Nigeria, Kenya, Morocco, Ivory Coast and Egypt. Other contenders include Samsung and Xtouch in Egypt, InnJoo and Wiko in Kenya, Samsung in Morocco, Itel and Samsung in Ivory Coast and InnJoo in Nigeria. We reach the same conclusion when looking at both online and offline sales in these markets as Asian brands have gained a true head start in the game,” the report revealed.
For the period of December 2014 to December 2015, Samsung remains the top smartphone brand sold in those 5 markets, gaining a market share of over 50%. However, renewed competition from new players and product diversity appears to have greatly been to the African consumer advantage and contributed to increasing smartphone adoption rates leading to price points of smartphones in Africa radically dropping.
“We observed a drastic decrease of the average retail price of a smartphone in our 3 main markets: In Nigeria, Egypt and Kenya the prices tumbled down from $280 (Nigeria) and $200 (Egypt, Kenya) for a smartphone in 2013 to $100 for Nigeria and Kenya and $85 for Egypt in early 2016,” the report added.
Smartphones below $100 threshold have become more and more available across Africa, although they still have to reach mass-market adoption. For example, Chinese OEM Xinwei Telecom launched in June 2015 phones under the $20 bar that support videos and internet browsing in Malawi.
Smartphone sales have soared in Africa with Nigeria appearing to be at the forefront of this trend with a boom in smartphone sales of 349% from 2013 to 2014 on Jumia and of 366% from 2014 to 2015.
At the end of 2015, there were 3.258 billion smartphones in circulation around the world. The smartphone penetration rate is still growing strongly but has progressively slowed down from +65% in 2012, to +27% in 2013 and eventually to +23% in 2014. It is expected to reach 5.808 billion by 2020.
Smartphone adoption is higher in the developed world at 65% in 2015 and projected to grow to 76% by 2020. However, the progression in the developing world is faster with an increase of 23 points from 40% in 2015 to 63% in 2020. By 2020, Sub-Saharan Africa should reach a total of 540 million smartphones from 380 million at the end of 2015.
Furthermore, there were 3.42 billion people across the world connected to the Internet, representing close to 46.1% of the world’s total population as of latest data released for 2016. Interestingly, Africa is expected to reach 500 million Internet users by 2020 with majority of which expected to access internet through a mobile device.
No doubt, mobile broadband connections in Africa will reach 57% by 2020 up from 24% in 2015, the report stated.
Mobile devices are increasingly being used across the world to go on the Internet and connect:63% of searches on Google are made on phones globally and according to Ofcom Adults’ Media Use and Attitudes Report (2015), 61% of adults prefer to go online on their mobile.
Nigeria is one of the most mobile connected countries with 76% of its Internet traffic happening on mobile, overtaking India (65%), South Africa and Indonesia. Egypt is in the top 15 but far behind, with only 19% of its internet traffic going through mobile.
Mobile remains the key device in Africa to bring Internet access part of that success attributed to prohibitively expensive broadband services and limited fixed line infrastructure.
The main challenge regarding mobile broadband connections in Africa in the next coming years will be to switch to higher quality connections (3G and 4G). If those represent almost 50% of the total connections at the end of 2015 globally, Africa is lagging behind and expected to reach 7% by 2020, 10 times less than the expected global rate (70% by 2020).