According to recently released report by Counterpoint Research, over 70% of the smartphones sold in Africa and the Middle East during the first quarter of 2019 were price around the $150 segment. The report further notes a marked increase by users from feature phones to smartphones in the region.

This is also noted when looking at the fact that the smartphone market in the Middle East and Africa, according to CounterPoint Research, increased by 6% year-on-year (YoY) in Q1 2019, while the feature phone market decreased by 6% (YoY) during the same period.

"There is an increasing transition of users from feature phones to smartphones in the region. Availability of affordable devices, the growing ecosystem of refurbished devices, and increasing internet penetration are fuelling the switch to smartphones, especially in the African Region. In the larger African countries, like Nigeria and Kenya, smartphones remain the primary medium to access internet services. There is also increasing popularity of the mobile money ecosystem, which is driving further smartphone adoption.  Price remains a key factor for smartphone adoption. Over 70% of the total smartphones sold in the region were in the sub- $150 price segment," said Tarun Pathak, Associate Director at Counterpoint Research.

Source: Counterpoint Research Market Pulse Q1 2019.

What comes with little surprise from CounterPoint Research is the mention of Transsion's brand of phones leading the way with 19% market share in the smartphone segment and a 71% market share in the feature phone segment. Transsion is a Chinese manufacturer of mobile devices, it makes and sells three brands of mobile devices in Africa: namely TECNO, itel and Infinix.

The Chinese manufacturer has also in recent years started making use of its distribution channels to start offering digital media services. It co-owns a digital music platform called Boomplay which is pre-installed on the smartphones it sells in Africa, and recently reached an agreement with China Literature to pre-install their literature app on its smartphones distributed across Africa.

Transsion's advantage, especially in Africa, is its deep distribution network in West, East, and parts of North Africa.

Feature phones still dominate

Although in decline, feature phones are still the more used type of mobile phones on the continent. This is also noted by CounterPoint Research.

"Although declining, feature phone remained relevant in the MEA and contributed to 34% of the total handsets sold during the quarter. In terms of shipments, MEA has surpassed India to become the largest feature phone market globally in 2019. Factors like the dearth of infrastructure, affordability, literacy, and ease of use continue to make feature phones a viable option in the region," said Varun Mishra, Research Analyst at Counterpoint Research.

Their popularity will likely be boosted by the recent announcement by two of Africa's large telecommunications companies, MTN and Orange, have announced the availability of smart feature phones running on KaiOS which will sell for as low as $20. A smart feature phone is typically seen as a customer's transition from a feature phone to a smartphone as they allow users access to the Internet at a lower cost than a smartphone.

Highlights from CounterPoint Research

  • The top five smartphone brands captured 49% of the market.
  • Samsung led the smartphone market by volume, capturing one-fifth of the total smartphone market in Q1 2019. However, the sell-through for the brand declined 23% YoY in MEA.
  • Huawei was one of the fastest growing brand driven by the Y9 and P20 Lite. The brand grew 27% YoY. HONOR also grew 122% YoY, albeit small base. However, the future for both Huawei and HONOR remains uncertain amid the current US-China trade war.
  • Sub-$100 segment captured 55% of the total smartphone market. Premium segment ($400 and above) captured single-digit market share in the price-sensitive MEA market.
  • Close to one-fifth of the smartphones in the MEA region are still 3G. Although the transition is happening from 3G to 4G, as 4G capable handsets become more affordable and network availability increases.
  • Feature Phones contributed to over one-third of the total sell-through in Q1 2019.
  • iTel and Tecno lead the feature phone segment together, capturing over 70% of market share. Tecno defied the feature phone segment decline and grew 15% YoY.
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