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New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires –
November 28, 2019
The smartphone market in Middle East and Africa (MEA) grew a modest 2% year-on-year (YoY) in Q3 2019, while the feature phone segment remained flat, according to Counterpoint Research’s latest Market Pulse report. Overall handset market grew 1% YoY. One of the main reasons for modest growth in the region is slowing in key countries. Markets like Nigeria, Egypt and South Africa that contribute to one-fourth of the overall regional sales are recovering from economic and regulatory challenges.
Commenting on the smartphone market growth, Tarun Pathak, Associate Director at Counterpoint Research, said, “The Middle East and Africa markets are at different stages of development and face a variety of economic, political and regulatory challenges. The region is largely under-penetrated (~40%) even though it is the third-largest region in terms of absolute internet users (>500 Mn). Hence, the next level of growth in the region will be driven by first-time internet users. While the Middle East is traditionally a strong and developed region, there are countries in Africa (Namibia, Tanzania, etc) where customers are paying among the highest rates in the world to access the internet. To bridge this gap a collective effort from telecom operators, government and handset players is required.”
Commenting on the OEM landscape, Varun Mishra, Research Analyst at Counterpoint Research said, “Transsion Group’s brands’ (iTel and Tecno) feature phone share reached its highest ever in MEA during the quarter. Feature phones remain relevant to the mass market in Africa. Entry-level smartphones are unable to provide a good experience due to the limitations of the device specifications, especially in the <$40 segment. Additionally, the high data and device cost along with other challenges, like digital illiteracy, is holding back users from migrating faster to smartphones. In terms of smartphones, brands like Samsung and Tecno are looking to expand their operations in the region through relevant partnerships. For Example, Tecno opened its first-ever flagship store in Nigeria recently. Among other key Chinese players, Huawei is the only brand having a strong presence in the region while vivo, OPPO, and Xiaomi are still looking to enter or build scale in African countries. The USA trade ban did not lead to steep declines for Huawei in MEA as its older Y-generation models were still selling well.”
In terms of smart feature phones, KaiOS continues to expand in the Africa market as it launched devices with Tecno and Vodacom. It has already launched devices with MTN and Orange. Compared to Q3 2018, shipments for KaiOS have grown over 600% in Africa (from a small base). The devices can be pivotal in capturing first-time internet users. The market holds promising potential for smart feature phone segment. However, keeping the prices of these devices as close to the traditional feature phone as possible remains key to the success of smart feature phones in the region.
Exhibit 1: MEA Smartphone Market Share MEA Feature Phone Market Share
Source: Counterpoint Research Market Pulse Q3 2019
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