Mexico’s mobile handset market, the second biggest in Latin America, reported a 14% YoY sales decline in Q3 2022. But the country’s feature phone sales volume more than doubled YoY in Q2 and Q3, recovering to pre-COVID levels. This rise in feature phone sales can be attributed to the re-entry of i-mobile and Nokia into the market with new devices at attractive price points. BLU, Alcatel, Senwa and Zuum are the leading feature phone players in the Mexican market and together account for more than 45% share.
In Q3 2022, Alcatel and BLU were the biggest losers YoY. Surprisingly, Alcatel reduced its portfolio to only one model –1066. BLU’s only-open-channel strategy ended up hitting its sales. Nokia managed to capture the space thus created with its 106 and 105 2021 models in the <491 Mexican pesos ($25) retail price band.
Senwa saw a mixed performance in Q3 2022. Its Klick series softened the impact of competition in the <491 Mexican pesos retail price band, driven by its performance in the operator channel. On the other hand, devices from the >491 Mexican pesos band were not able to sell as expected. The customer perception of Senwa feature phones being low-priced is affecting these devices on the demand side.
Local king Zuum was affected by model cannibalization. Newest models like the Brix R II and Fun R series continued with strong sales momentum. But the Brix series suffered the most, leading to the brand seeing an overall YoY decline. The latest models show just a 196 Mexican pesos ($10) retail price increase over the previous versions.
The “Others” category saw a strong performance in Q3 2022 due to Nokia, Doppio and Bmobile’s aggressive sell-in volume during the quarter, taking advantage of lower import costs due to a depreciating currency.
Competitiveness is the main driver for this feature phone market which is flat compared to 2019 but has managed to resist the weakness in the country’s overall handset market. There are market trends like smartphone bundles and financing plans that indicate a bleak future for feature phones in Mexico.