Declining Smartphone Shipments To Africa: Inherent Lessons

In what appears in total contrast with the present declining smartphone shipments to Africa, 2022 reports for 2021 by statista.com reveal how smartphone vendors sold around 1.43 billion smartphones worldwide.

Moreover, the reports also have it that in the fourth quarter of 2021, around 24 percent of all smartphones sold to end users were Apple smartphones.

Based on the reports as well, the smartphone penetration rate was still on the rise.

Specifically, the report stated that less than half of the world’s total population owned a smart device in 2016, but the smartphone penetration rate has continued climbing, reaching 78.05 per cent in 2020.

By 2025, it is forecast that almost 87 per cent of all mobile users in the United States will own a smartphone, an increase from 27 percent of mobile users in 2010.

However, according to Counterpoint Research Market Monitor (CRMM) reports, smartphone shipments to the Middle East and Africa region fell to a seven-year low in 2022 due to high inflation and currency depreciation. 

Shipments declined by 12.1 per cent year-on-year to 148 million units in 2022 despite a bright start to the year.

The rise in energy and agricultural goods prices caused by the Ukraine war dampened consumer sentiment in the region, and the macroeconomic situation gradually worsened as the year went on.

According to the data insight monitor, in the fourth quarter of 2022, smartphone shipments dropped to 18.4 per cent y-o-y, slightly better than the 20.4 per cent decline recorded in the third quarter of 2022.

It said, “Consumer sentiment may have picked up marginally as the inflationary pressure and foreign currency headwinds receded.

"Still, the market environment remained very challenging.”

Commenting on the decline, Senior Analyst, CRMM, Yang Wang, said, “The MEA smartphone market closed the year with another tough quarter.

“Much of the difficulties, such as high inflation rates, energy and food prices, and depreciating domestic currencies against the US dollar, were caused by factors outside of the control of market participants.

"With the drop in consumer sentiment, OEMs were put under enormous pressure and had to take drastic measures such as destocking, cutting marketing and channel spending, and taking a very careful approach to pricing.”

Following the launch of 5G in key regional markets like Nigeria, there was an uptick in 5G smartphone shipments.

5G shipments grew by 47 percent to reach 18 percent of overall smartphone shipments to the region.

The firm added, “One of the spotlights in the MEA smartphone market in 2022 was the growth of the 5G segment.

"5G smartphone shipments grew 47 per cent to reach an 18 per cent share of the overall shipments against our forecast of 16.5 percent at the beginning of 2022.

“While 5G networks are only available in the GCC countries and certain pockets of Africa’s urban areas, the enthusiasm for 5G devices has been noted across the largest markets.” 

The firm noted that the prices of 5G smartphones were falling due to the availability of affordable models.

Conclusion

The above analyses are self-explanatory enough and one needs no rocket science to understand them.

This is because while the governments of the developed countries are in pursuit of transparent policies that facilitate the ease of doing business, African leaders are, at best, in pursuit of self-serving and protectionist policies.

With a world economy ferociously raging like never before known, it is common sense that unprepared economies will pay dearly.

When this happens, the purchasing power of the citizens will drop. 

This explains the above African statistics for declining shipments of smartphones to Africa.