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Feature phone market in Nigeria grew 15% annually offsetting the smartphone decline in 2017

The Nigerian economy faced a major downfall due to recession. This affected the market demand for smartphones, as a result of which, consumers upgraded to feature phones  

New Delhi, Mumbai, Hong Kong, Seoul, London, Buenos Aires – Feb 23th, 2018

 

According to the latest research from Counterpoint’s Market Monitor service, the Nigerian handset market grew by a modest 6% in CY 2017. The Smartphone market which contributed to 52% of the total handset volume declined by 1% YoY due to the economic slowdown. Samsung led the overall smartphone market with 34% share in terms of shipments volume.

Commenting on the findings, Anshika Jain, Research Analyst said, “The Nigerian handset market declined 8% YoY in 2016 as the economy witnessed a major downfall in GDP due to plummeting oil prices which felled the economy into recession. The country is highly dependent on oil exports and the decline in oil prices put pressure on the Nigerian currency, Naira raising the prices which adversely affected the purchasing power of the people. The overall handset market experienced modest growth of 6% p.a. in CY 2017 as the market is slowly moving out of recession. The situation is likely to improve in 2018.”

Discussing the brands’ performance, Anshika highlighted, “The top 2 OEMs – Samsung and Transsion Group (its brands include Tecno, Itel and Infinix) captured two-third of the total smartphone market. Samsung still retains the top position with more than one-third share in the total smartphone market. While in the feature phone segment, the market is dominated by a single OEM with 76% share. This highlights the dominance of Chinese players in the feature phone market”.

Looking at the overall market, Tarun Pathak, Associate Director at Counterpoint Research said, “Almost one-third of mobile subscribers currently use smartphones in Nigeria. With the country now out of its economic recession, we estimate the smartphone market to grow in double digits in CY 2018, driven by the entry of new players and changing OEMs strategies. Operators like Airtel and MTN will also look forward to partner with OEMs and Microfinance companies to drive smartphone penetration across the country.”

Exhibit 1: Nigeria Smartphone Shipments Market Share in 2017

Exhibit 2: Nigeria Feature Phone Shipments Market Share in 2017

Source: Counterpoint Research Market Monitor CY 2017

Market Summary:

  • Nigeria’s smartphone market shipments volume declined by 1% YoY in CY 2017.
  • Top 5 brands accounted for 70% of the smartphone shipments.
  • Samsung led the overall smartphone market with a share of 34% in CY 2017. Though its shipments volume, declined 4% on an annual basis due to rising competition in the market and availability of affordable devices.
  • Tecno captured the second position in the smartphone segment with 16% market share, as the company introduced new smartphone models under ‘Spark Series’ and upgraded its existing ‘Camon Series’. The company also offered huge discounts on its newly launched models in the third quarter of 2017.
  • Itel remained at the third spot in the smartphone segment as its shipments increased four times and the company expanded its product range and distribution.
  • During the year, several new brands entered the Nigerian Market like Freetel, Xiaomi and Motorola in the smartphone segment. However, they captured a smaller share of the overall smartphone market.
  • In terms of distribution, approximately 85% of the total Nigerian market sales are through offline channels and online channels contribute to 15%. TD-Mobile is the leader in offline distribution while the online market is dominated by Jumia and Konga.
  • Feature phone penetration reached 48% of total mobile phone shipments in 2017, up from 44% a year ago.
  • The feature phone segment grew by 15% YoY, driven by strong performance of Tecno, and Itel.
  • Tecno became the number one player in the Nigerian feature phone market in 2017 with 41% share in 2017. Its dominance is due to affordable offerings and wider reach.
  • Nokia HMD quickly gained 6% market share in 2017 due to strong performance of Nokia 105 (2017).
  • The Nigerian handset market is highly concentrated towards low price segment as the consumers are highly price-sensitive.

 

 Methodology

The Market Monitor research is based on sell-in (shipments) estimates based on vendor’s IR results, vendor polling triangulated with sell-through (sales), supply chain checks and secondary research.

The comprehensive and in-depth 2017 Nigeria Market Monitor is available for subscribing clients. Please feel free to reach out to us at press@counterpointresearch.com for further questions regarding our in-depth latest research, insights or press enquiries.

 

Analyst Contacts:

Tarun Pathak
tarun@counterpointresearch.com

Neil Shah
neil@counterpointresearch.com

Anshika Jain
anshika@counterpointresearch.com

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