Cheap smartphones to take over markets

By Adeyemi Adepetun   |   04 August 2015   |   7:23 pm  

Basic-Phones---CopyTHERE are indications that cheaper smartphones are going to flood the markets, especially in developing countries any moment soon. This is according to Ovum’s latest findings.

The smartphone market in Nigeria and indeed Africa is expected to see 17 per cent Compound Annual Growth Rate (CAGR) over the next six years.

As at early 2014, the Executive Vice Chairman of the Nigerian Communications Commission, Dr. Eugene Juwah, at a forum in Lagos, frowned at Nigeria’s 12 per cent smartphone penetration, amidst the huge market potential in the country. But early this year, the Director of Mobile Business Group at Lenovo, Middle East and Africa (MEA), Shashank Sharma, also in Lagos, said the penetration has hit 30 per cent.

But Ovum, an International telecommunications and Information Technology research firm, based in London, United Kingdom, in one of its latest findings on the global smartphone market, informed that smartphones are set to snaffle 95 per cent of global handset sales by 2020, up from 65 per cent in 2014, but that most of this growth will come from the sale of sub-$100 devices in both developing and developed countries.

As such, Ovum disclosed that vendors (and users) are looking at steep price declines for the next five years. However, the report said the price decline so far is “largely attributed to a structural shift toward lower-end smartphone models rather than price decreases in particular segments.”

Whichever way it is been looked at it, Ovum said from the user side that means an excellent smartphone or phablet (albeit without the magic branding sauce) will soon be for grabs for around $100.

In support of its projections, Ovum’s study pointed out that between 4Q13 and 4Q14, the median price of prepaid and SIM-free smartphone, which now account for over half of all operators’ offers, decreased 28 per cent, from $360 to $258.

For the first time, Ovum claimed that there will two billion unit sales in 2020 when Android and iOS devices will continue to lead the market (80 per cent and 14 per cent respectively). “Not much hope for Microsoft there, with just 4.2 per cent share.”

Ovum said: “Africa and the Middle East and Latin America will lead the smartphone market in terms of growth over the next six years with a CAGR of 17 per cent and 11 per cent respectively, reaching a combined 576 million units sales by 2020, up from 254 million in 2014.

“In Asia Pacific, the Chinese market is reaching saturation with an expected CAGR of only 4.1 per cent in the next six years, versus 19.7 per cent for India and 16.3 per cent for Indonesia. North America and Western Europe will be trailing behind with a CAGR of only two per cent in the next six years”, he stated.

Though a 2014 report from the Ministry of Communications Technology, disclosed that about four million mobile phone units enters Nigeria monthly, but at the launch of Wiko Phones, a French brand in the country late last year, the International Business Director of Wiko Mobile, Marcel Van De Pas, disclosed that by the end of 2014, about 24 million mobile phone units would have been shipped into Nigeria.

According to him, smart phones account for 20 per cent or 400,000 units of the estimated two million monthly mobile device market in Nigeria.

Findings by The Guardianshowed that there has been an increase of different types of smartphones and tablets into Nigeria, with European mobile phone makers struggling to outrun tradition leaders from China and South Korea.

Early this year, the mobile phone makers from Europe, Lenovo and Archos launched their devices, which include smartphones, tablets and accessories into the Nigerian market.

Sharma, the huge shipment of devices to Nigeria is because it is a vital focus for most organisation.

He said: “Nigeria is one of the fastest growing smartphone markets globally. With about 30 per cent smartphone penetration, the country represents huge growth potential for Lenovo.”

He added that in the past one year, Lenovo has made strong progress with its Nigerian consumers saying that Lenovo considers the region as a principal destination for investment.



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