Africa’s smartphone market saw shipments decline 2.3% quarter-on-quarter during the third quarter of 2021, amid the negative impact of component shortages.

While the region showed signs of recovery during the first half of 2021, the component shortages started impacting on smartphone shipments during the quarter under review, data from global market intelligence and advisory services provider International Data Corporation (IDC) shows.

The IDC’s Quarterly Mobile Phone Tracker shows, however, that the feature phone market on the continent remains buoyant, growing 14.2% quarter-on-quarter during the third quarter of 2021.

“With smartphone prices remaining relatively high and only expected to increase over the coming following quarters, the affordable prices of feature phones make these devices extremely attractive,” the IDC report notes.

Africa’s top three smartphone markets, namely Egypt, Nigeria and South Africa, recorded mixed performances during the third quarter.

Shipments in Egypt declined 19.5% quarter- on-quarter, while shipments destined for Nigeria decreased 9.4%.

According to the IDC, both markets are dominated by Chinese brands that had lower shipments, owing to component shortages.

South Africa, however, saw shipments increase 28.4% quarter-on-quarter, with Nokia performing well with its competitive C-series models and Samsung having a strong quarter in preparation for the festive season.

Meanwhile, the average selling price (ASP) for smartphones in the quarter under review declined 0.7% quarter-on-quarter, owing to new models being launched in the entry-level price bands.

The under $100 price band saw shipments increase 5.9%, while shipments of devices in the $100 to $200 and $200 to $400 price bands declined 14.1% and 0.7% respectively.

Fourth-generation (4G) devices accounted for 81% of smartphones shipped into the region in the third quarter of 2021, followed by third-generation devices with a 15.9% share and fifth-generation (5G) devices with just 3.1%.

“The 5G market is still below its full potential in Africa, owing to poor telecommunications infrastructure. 4G will remain dominant as telcos are keen on recouping the huge investments they made in 4G infrastructure that is yet to be fully used,” says IDC research analyst George Mbuthia, adding that the relatively high cost of 5G devices is another inhibitor.

“In the longer term, however, prices will start declining as more vendors launch affordable 5G models.”

The IDC expects smartphone shipments into Africa to have grown 7.6% during the fourth quarter of 2021.

“The market will perform better in the final quarter of the year as channels will look to secure shipment allocations to manage supply shortages and capitalise on the high demand for smartphones driven by December festivities and Black Friday promotions,” adds IDC senior research manager Ramazan Yavuz.

“A more stable recovery in the supply chain is expected starting from the second half of 2022 when component shortages will start to ease. After this period, the transition from feature phones to smartphones will accelerate as there is clear demand for smartphones in the African market.”

Meanwhile, while the IDC expects to report growth in global smartphone shipments for 2021, despite supply chain constraints, the group has lowered its growth forecast for 2021 and 2022 from 7.4% and 3.4% respectively to 5.3% and 3% respectively, owing to the lower-than-expected growth in the third quarter and the continued component shortages and logistical challenges, which may not improve until mid-2022.

From 2023, the IDC expects a healthy 3.5% five-year compound annual growth rate fuelled by pent-up demand, declining ASPs and continued transition from feature phones to smartphones.

“Although we expected a slowdown in the third quarter, the market declined by almost twice the projected rate as the supply chain and logistical challenges hit every major player in the market,” explains IDC mobility and consumer device trackers research director Nabila Popal.

The shortage is more heavily concentrated on 4G components than 5G, which will impact vendors with a higher portfolio mix of 4G devices than vendors with a higher proportion of 5G models.