MEA Smartphone Market Growth Slows in Q3 2019

New Delhi, Hong Kong, Seoul, London, Beijing, San Diego, Buenos Aires –

November 28, 2019

  • MEA smartphone market grew just 2% YoY in Q3 2019.
  • 2 out of the top 3 markets, Nigeria and South Africa, are facing economic challenges.
  • Transsion Group’s feature phone market share reached the highest ever (77%), Samsung led the overall smartphone market (29%)

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

Middle East and Africa Market Share Q3 2019 Counterpoint

Source: Counterpoint Research Market Pulse Q3 2019

Market Summary:

  • The top five smartphone brands captured 58% of the market.
  • Feature phones contributed to 37% of the total handset sales during the quarter. iTel and Tecno’s combined feature phone market share reached highest ever as long-tail brands in feature phone segment started exiting the African market.
  • Samsung led the smartphone market by volume, capturing 29% of the total smartphone market in Q3 2019. Galaxy A series contributed to a record 4/5th of Samsung’s sales with A10 and A20 Core being the best-selling models.
  • Tecno overtook Huawei to take the second position in the market. Spark 3 and Pop 2 Power were the bestselling models.
  • Huawei sales were driven by the Y series. Y series contribution to Huawei total smartphone sales reached a record 70% from 47% during the same quarter last year
  • iTel remained strong in the sub $50 segment while Infinix was one of the fastest-growing brands YoY (34%) to capture 4% of the market. remained strong in Nigeria.
  • Sub-US$100 segment captured 55% of the total smartphone market. Premium segment (US$400 and above) captured only 6% of the volume in the MEA region and principally from the developed markets such as UAE and Saudi Arabia.
  • The more advanced Middle East smartphone market remained flat. During the third quarter, some countries in the Middle East launched 5G for the first time in markets like Kuwait, UAE, Qatar, Bahrain and Saudi Arabia. 5G is likely to see fairly rapid growth in the developed Middle East markets as early as 2020 while for Africa markets it is still several years away.

The comprehensive and in-depth Q3 2019 Market Pulse is available for subscribing clients. Please feel free to contact us at press(at)counterpointresearch.com for further questions regarding our in-depth latest research, insights or press inquiries.

Analyst Contacts:

Tarun Pathak

Varun Mishra
 

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