Africa’s smartphone market witnesses a further decline in Q3 of 2022 – IDC Tracker

Godfrey Elimian
The drop marks the largest-ever third quarter decline and the fifth consecutive quarter of decline for the smartphone market
Smartphone market in Africa to witness more decline in Q3 of 2022
Smartphone market in Africa to witness more decline in Q3 of 2022

The smartphone market is experiencing a decline due to the economic meltdown and inflationary tendencies affecting various world economies.

This can be traced to several factors, which include trade sanctions on Russia by the rest of Europe amidst their continued war against Ukraine, the Pandemic in 2020 and several other macroeconomic factors which have resulted in mass layoffs and dips in revenues of major companies and multinationals.

Business Wire reports worldwide smartphone shipments declined 9.7% year over year to 301.9 million units in the third quarter of 2022 (3Q22). This is according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. 

Refurbished Smartphones
The smartphone market faces a decline amidst a global downturn

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

According to the IDC Phone Tracker report, Africa and emerging markets in Asia/Pacific, Latin America, and the Middle East would see a more significant double-digit decline in phone shipment for the rest of 2022.

The drop marks the largest-ever third-quarter decline and the fifth consecutive quarter of decline for the smartphone market as shipments continue to struggle amidst weakened global demand and economic uncertainties.

According to the Research Director of IDC’s Worldwide Tracker team, Nabila Popal, the decline can be associated with aggregate demand factors and inflation, reducing households’ purchasing power parity.

She said:

“A majority of the decline came from emerging markets where lack of demand, rising costs, and inflation impacted consumers with lesser disposable incomes”

Nabila Popal

She explained that while the backlog of inventories from the previous quarter prompted big telephone vendors to establish a plan to prevent a repetition of the poor sales performance, this didn’t stop the vendors from experiencing the same problems they do now.

“With high inventory coming into the quarter, shipments and orders by OEMs were further reduced in an attempt to deplete inventory. Although Chinese vendors continue to suffer the most, all vendors were impacted, including Samsung and Apple.”

While Apple is the only vendor to deliver positive growth this quarter, it still faced challenges as its growth was stunted in many markets, including China, due to the poor macroeconomic situation.

Looking to 2023, the market’s expected recovery, which we believe will happen, will be pushed further into the year. Moreover, we now expect a steeper shipment decline for 2022 and a softer recovery in 2023″, she added.

Read also: Nigeria telcos gained 2.9m new telephone subscribers in May- NCC report

Regional forecast for the smartphone market

Although the decline comes from emerging markets like Africa, Latin America and the rest, other regions are set to experience the same situation, whether mild or heavy.

Samsung smartphones

All regions, except Central and Eastern Europe, are anticipated to experience declines for the rest of the year. Prior projections of a fall of slightly over 12% for the quarter for China should mostly hold true. Given China’s size, this greatly affects the overall outcomes.

Th reports suggests that developed markets like North America, Western Europe, and Japan will do moderately better, but this still implies low to mid-single-digit declines

Vice President with IDC, Ryan Reth explains this parity that is expected in the regions. He said:

“Developed markets that often sell more premium devices are faring better than emerging markets where smartphones sell for a fraction of the cost. We believe this is largely supported by the expansion of instalment plans offered through telcos, retail channels, and even direct from vendors. Promotional activity around trade-in offers also supports that shift,

However, as we look toward next year and beyond, if the global market is going to grow, it will need a strong recovery in emerging markets to make that happen.”

“We’re seeing some unique dynamics unfold across the globe regarding smartphone sales”

Ryan Reth, Group Vice President with IDC’s WMCDT

From this statement, one can infer that emerging markets like Africa, are the backbone of the smartphone market globally. Statista reports suggests Nigeria for example, Africa’s biggest economy and most populous country, is forecasted to grow to more than 140 million telephone users by 2025.

Hence, a decline in that expectation caused by the many economic and macroeconomic factors the continent is grappling with would significantly affect the market’s growth in Africa.

Data fromInternational Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker on Smartphone markets
International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker. 

Notwithstanding, despite this challenging environment, vendor positioning did not change from last quarter. Samsung held the top spot with a 21.2% share, Apple came in second with a 17.2% share, while Xiaomi came in third with a 13.4% share. Vivo and OPPO ended the quarter tied for the fourth position, each with an 8.6% share.

Except for Apple, all the top vendors suffered year-on-year declines. However, while Samsung and Xiaomi registered single-digit declines, Vivo and OPPO continued to suffer high double-digit decreases.

Read also: NCC says it will auction 2 additional 5G licenses by December 2022


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