Smartphone sales in Nigeria rose 81% in 2021, expected to rise this year

Afeez Odunoye
*Rising demand and low data costs drive an increase in smartphone purchases | *Average sales price of expected to rise further this year
Refurbished Smartphones
Refurbished Smartphones

Annual smartphone sales in Nigeria rose by 81% year on year (YoY) in 2021, according to a new report by Counterpoint Research.

The figure represents a significant shift in sales for original equipment manufacturing (OEM) brands serving the Nigerian smartphone market. In 2020, the brands endured cuts to the monthly and annual sales of their offerings in a year characterised by pandemic-induced lockdowns and restrictions.

What this means

Nigeria’s smartphone market is one of Africa’s top four smartphone markets. Others are South Africa, Egypt and Morocco.

Per the report, the market witnessed rising demand in 2021 with a couple of factors shaping the growth.

Improving economic conditions, pent-up demand and the entry of new Chinese OEMs meant Nigerians dipped their hands into their pockets to buy more smartphones than they did a year before.

But it doesn’t stop at that. A culture of increasing digital adoption, ‘enforced’ by the pandemic, expansion of social media, entertainment, and mobile money, and a drop in data costs also drove customer demand.

Network penetration and growth

According to research associate Anam Padha, the sales share of 4G LTE smartphones in Nigeria grew to 72% in 2021, while 3G smartphones dropped.

The 4G network is 500 times faster than 3G.

Smartphones that accommodate the 4G LTE network download files ten times faster than 3G-enabled phones.

Padha, who worked on the report, said, ”The expansion of 4G networks by operators will keep data costs low even as better connection quality and improved internet experience fuel further growth. 5G smartphone sales penetration grew from 0.3% in 2020 to 3% in 2021.”

Average sales price of smartphones (ASP) on the rise

Discussing the ASP trend in the Nigerian smartphone market, research associate Ravyansh Yadav commented:

The ASP of smartphones sold in Nigeria grew 9% in 2021 driven by demand for devices capable of handling heavy internet use. Nearly 90% of smartphone sales in 2021 were in the less than $200 price band, where Transsion brands Infinix, itel and TECNO captured 63% share. Transsion brands are expected to maintain their price competitiveness for the foreseeable future.

Ravyansh Yadav

In 2020, Transsion brands (Infinix, itel and TECNO) also made the top four smartphone OEMs in the country. The brands shared 63% of the market share among themselves. Competitive pricing and aggressive promotion helped endear the OEMs to users.

Chart bearing smartphone OEMs’ market share for 2020 and 2021. Counterpoint Research.

Takeaways

According to Counterpoint Research, TECNO recorded its highest-ever annual smartphone sales in 2021 reaching five million units. The brand also maintained its top position for the fifth consecutive year, driven by the performance of its Camon series, multiple sales events, and an increase in marketing activities.

South Korean OEM, Samsung, overtook itel to grab the second position in 2021. The company more than doubled its annual smartphone sales. Swap-and-trade as an upgrade option for customers, price cuts during sales events, multiple new launches in the popular A-series and celebrity endorsements drove its growth.

Budget-friendly itel captured a 19% sales share to place third. The share was driven by a strong low-tier portfolio, partnership with retail outlet Spectrum in Q3 2021, multiple launches and aggressive promotional activities.

Infinix showed rapid growth at 163% YoY in 2021, driven by its popular mass-market series Hot and Note.

Despite ranking fifth in the report, Xiaomi emerged as the fastest-growing brand with 173% YoY growth in 2021. The Redmi 8 and Note 8 series aided the brand as its best-performing products. Xiaomi put greater focus on brand visibility in its marketing strategies throughout the year, especially during the launch of the Redmi 10 series.

Projections

As commercial activities progress in the Nigerian smartphone market, analysts are projecting a further increase in smartphone ASP. And this is tied to a nagging inflation problem. The country’s inflation rate rose to 15.92% in March, per the National Bureau of Statistics (NBS).

Despite an 8.9% decline in smartphone shipments globally, the International Data Corporation expects the African smartphone market (including Nigeria) to grow 3.8% in unit terms at the end of the year.

Due to accelerating digitalisation, Counterpoint Research says the demand for low-tier smartphones will rise further. Although the supply chain witnessed improvement earlier this year, unresolved issues could cap growth.

Transsion brands seem better placed than other brands to grow but may face increasing competition from new Chinese OEMs like Xiaomi, OPPO and vivo.

Ultimately, the Nigerian smartphone market is likely to remain flat in 2022, despite the government lifting the ban on new SIM registrations and lingering economic hardship.


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