Canalys: African smartphone market expands 6% in Q2’24 to 17.8mn units

The African smartphone market experienced a 6% year-on-year increase in the second quarter of this year, reaching 17.8 million units, according to a report by Canalys, a technology market analyst firm. Senior Analyst, Manish Pravinkumar, highlighted the emergence of device financing as a critical driver in sub-Saharan Africa. Despite this positive trend, challenges such as consumers' willingness to pay, digital literacy, high taxation on devices, and currency fluctuations are hindering the full potential of smartphone adoption across the continent. During an interview with CNBC Africa, Pravinkumar discussed the dynamics of the smartphone market in Africa, highlighting various factors affecting the industry. One of the key challenges facing the African smartphone market is consumers' willingness to pay. Many consumers are still using feature phones due to the price segment barrier, with a large number unable to upgrade to smartphones. However, there has been a shift towards budget-friendly options, with vendors offering powerful products at competitive prices. As a result, the average selling prices (ASPs) have decreased significantly, making smartphones more accessible to a wider consumer base. Pravinkumar noted that this trend is likely to continue in the coming quarters, driven by the cost of living and increased demand for budget-friendly devices. Another challenge highlighted in the interview is the impact of high taxation on devices in African markets. Import taxes play a significant role in the pricing of smartphones, with countries like Nigeria heavily reliant on imported devices. This dependence puts pressure on foreign currency reserves and leads to currency fluctuations, affecting the affordability of smartphones for consumers. Despite these challenges, Pravinkumar pointed out that vendors like Xiaomi are investing in the market and gaining market share against established players, demonstrating the potential for growth and competition in the industry. Moreover, the conversation touched on the role of device financing in driving smartphone adoption and digital literacy in Africa. With 52% of the market still dominated by feature phones, there is a significant opportunity to transition consumers to smartphones, particularly in the era of 4G and 5G networks. Pravinkumar cited the success of M-KOPA in Kenya, where device financing has facilitated the transition to smartphones. He emphasized the importance of governments investing in telecom infrastructure to enable this shift and highlighted the potential for device financing to accelerate the adoption of smartphones across the continent. In conclusion, the African smartphone market presents both challenges and opportunities for stakeholders in the industry. Addressing issues such as pricing, taxation, and digital literacy is crucial to unlocking the full potential of smartphone adoption in Africa. By leveraging innovations in device financing and government regulations, the industry can overcome barriers and drive growth in smartphone penetration. The evolution of the African smartphone market continues to be shaped by changing consumer preferences, competitive dynamics, and technological advancements, setting the stage for a dynamic and evolving industry landscape.