Smartphone Adoption in Africa: the RisingSmartphone Market

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Apr 4, 2014 3:06:00 PM

Africa has emerged as the fastestgrowing mobile market in theworld. The mobile subscriptiongrowth rate in Africa is easilyoutstripping mature mobilemarkets elsewhere in the world -while the rates are slowing acrossthe world it is set to remain atalmost twice the global average.

A more compelling trend showsthat much of the rest of the worldhas firmly embraced the move tosmartphones; around one in everyfour people worldwide is now asmartphone user. By contrastAfrica has just 112 millionsmartphone connections in a 930million total handset base, puttingAfrican smartphone penetration atjust 12 percent—the lowestpenetration rate of all the regionsin the world.

It's time for Africa...

According to IDC (InternationalData Center), their quarterlymobile phone tracker hasrecorded a steady increase on thesmartphone shipments to Africa inevery quarter and the Africansmartphone market is expected to double in volume over the next four years and account for close to athird of all handset shipments to the continent by 2017.

Device manufacturers who dominated the region over the past decade such as Nokia are making bigbets on the continent’s smartphone future with its Lumia Windows phone line. Huawei has since 2011bet that its sub $100 Android devices will herald a new era of smartphone penetration in some ofAfrica's largest mobile phone markets like Nigeria and Kenya. But the South Korean mobilemanufacturer Samsung is still leading the smartphone market with a 52.1% percent share, trailed byBlackberry with 17.8 percent. As a continent, Africa requires a very significant commitment in terms oflocal offices and resources in order to build out a presence and logistical capabilities across so manycountries. Samsung, with its broad range of consumer electronic products and a wide set up of itsassembly plants throughout the African land has been able to achieve just that.

There are several reasons behind the smartphone market uptake. As Emmanuel Revmatasof Samsung Electronics West Africa pointed out, the advent of new privately owned submarine cablesand their landing on the coast of many East and West African nations, including Nigeria, havesignificantly reduced the cost of Internet access and increased the adoption of smartphones on thecontinent. Besides, not only are the prices of smartphones, components and connectivity falling inAfrica, many markets are growing economically as well which will accelerate the rate of smartphoneadoption further. The new emerging African middle class, which is considered to take up 35% of thetotal population and the fastest growing demographic in the world are typically the most tech savvy andthe most likely to use mobile apps solving key pain points in their day to day lives from mobilecommerce to transit ticketing. For an economically booming region like Africa, mobile is at the heart ofall that.

Leapfroggin' brings innovation

Despite having a modest smartphone user base, mobile usage habits in Africa are actually relativelymature due to the fact that the market is excluded from the PC revolution by price and lack of fixedconnectivity, From Somalia to Kenya, people are able to pay for petrol, bills and groceries using theirsmartphones, and educational apps like m-learning has been successfully used throughout thecontinent. Increased smartphone penetration could lead to more African smartphone apps, such asSouth African Zapacab, which lets users locate taxi drivers and order a cab at the touch of a button. Itis not hard to believe that in the near future, from education to retail Africa's smartphone wave willredefine the continent's future in myriad sectors and at scale.

So in the context of African smartphone marketplace, launching the right product with cross-countryappeal and access to a wide range of applications would be key to success. More locally relevantproducts need to be developed with affordable price points. It is vital to drive down the cost and price ofmobile components and working with local handset makers is an effective way to bring high quality andlow cost device to the market. Price is a big factor for African consumers and they want to get the mostvalue for what they can afford.

Despite the strong smartphone market growth, the greatest obstacle lies in the access to mobile dataservices, especially limited network penetration in rural areas. Smartphones are only marginally moreuseful than feature phones if they do not have access to reliable networks. The good news is, Africangovernments are particularly aware and have been driving efforts to expand the networks in order toget the cost of connectivity down.

In general, a number of factors including a population with an appetite for new technologies, theconstruction of 3G networks, the decline in smartphone costs and a growing economy combinedtogether could make Africa a vital competitive region for most handset manufacturers and suppliersbefore long.

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