African Smartphone Market Growth Slows, Transsion Leads, Xiaomi Rises Against the Trend

African Smartphone Market Growth Slows, Transsion Leads, Xiaomi Rises Against the TrendCanalys' latest report shows that the African smartphone market grew by 6% year-on-year in Q2 2024, reaching 17.8 million units

African Smartphone Market Growth Slows, Transsion Leads, Xiaomi Rises Against the Trend

Canalys' latest report shows that the African smartphone market grew by 6% year-on-year in Q2 2024, reaching 17.8 million units. The growth rate has slowed down compared to previous quarters. The North African market performed outstandingly, leading the overall growth in Africa, while sub-Saharan Africa faces its own challenges.

Strong North African Market, Egypt Leads Growth

The North African market achieved double-digit growth in Q2. Despite import challenges, Algeria still grew by 52%, while shipments in Egypt jumped by 27%. Egypt's strong performance was driven by a stable currency and government support for local manufacturing, attracting manufacturers such as Xiaomi, Vivo, Samsung, and recently HMD is in talks for collaboration. Currently, all eyes are on Apple.

In contrast, Morocco saw shipments plummet by 24% due to import issues following an increase in tariffs at the beginning of the year.

Sub-Saharan Africa Faces Challenges, South Africa Grows 13%, Kenya Drops 22%

Sub-Saharan Africa is facing its own set of challenges. South Africa saw a 13% growth despite the impact of the post-election environment. Nigeria also saw a slight growth of 5% despite ongoing inflationary pressures, currency risks, sluggish GDP growth, and shrinking disposable income. Kenya, the trading hub in East Africa, saw a drop of 22% due to its ongoing political tensions.

Fierce Competition in Affordable Smartphones, Sub-$100 Segment Grows 42%

Manish Pravinkumar, Senior Analyst at Canalys, said, "Vendors are continuing to push shipments using cost advantages from the first half of the year, resulting in a 42% surge in the sub-$100 segment. 33% of shipments came from this price band." As living costs rise, consumers are increasingly gravitating towards more affordable devices. The average selling price (ASP) in Q2 2024 was the lowest in the past 11 quarters.

Vendor Rankings: Transsion Leads, Xiaomi Rises Against the Trend, Realme Makes a Strong Comeback

1. Transsion continued to dominate with a 51% market share but even as the leading vendor, it felt the pressure from the slowing market, with growth only at 1%.

2. Samsung maintained a 19% market share but saw shipments plummet by 25% due to reduced focus on entry-level models.

3. Xiaomi bucked the trend, growing by 45%, setting a record regional market share of 12%. The leading vendor's focused approach in Nigeria and Egypt, combined with an aggressive sales strategy and local investments, yielded significant results.

4. Realme despite holding only a 5% market share, made a strong comeback with a staggering 137% growth.

5. OPPO achieved 39% growth through a solid performance in the North African market, demonstrating its commitment to long-term investments and development in the Middle East. Its expansion of the Reno series product line and focus on innovation resonated well with consumers.

Device Financing Installments: A Breakthrough for Smartphone Penetration

Despite the rapid growth in the African smartphone market, feature phones still hold a 52% share, indicating significant opportunities for smartphone expansion. In sub-Saharan Africa, device installment plans are emerging as a key driver, making smartphones more accessible to ordinary consumers.

In the short term, promoting innovative financing models like M-Kopa in Kenya, with the support of smartphone manufacturers like HMD, telecom operators, and governments, is crucial to accelerate this transition. In the long term, local manufacturing will be key to lowering costs. With Egypt taking the lead, other regions are expected to follow suit.

Addressing broader challenges, such as consumer willingness to pay, digital literacy, high taxes on devices, and currency fluctuations, is critical to unlocking the full potential of smartphone penetration in Africa.