Smartphones sales in South Africa jumped by 28% year on year in the third quarter to reach three million units, while basic phone sales were up 6% to 1.6m units, according to tracking data from GfK South Africa.
Smartphone revenues were up 27% compared to the same quarter in 2016, as the market accelerated its transition from basic phones.
For the year to the end of the third quarter, smartphone sales were up 21.1% and smartphone revenues up 8.1%.
“The smartphone market in 2016 grew 5.2% in value and 10.5% in units in 2016, compared to the year before. Basic phones dipped 13.7% in unit sales and 1.9% in revenue. However, basic phones still command a 35% share of the market,” GfK said.
“Mobile operators are on a drive to boost data usage to compensate for a steady decline in voice revenues,” said Nikolay Dolgov, GM for point-of-sales tracking at GfK South Africa.
“Falling prices of smartphones, aggressive operator promotions and growing Wi-Fi/4G penetration are all helping to speed up the adoption of smartphones in South Africa.”
The company said fierce competition from Chinese brands is reshaping the entry-level smartphone market, with the average selling price for smartphones falling despite the weakness of the rand.
About 25 brands are contesting the entry-level smartphone market, compared to just six in 2013.
‘Scope for growth’
“While owning a smartphone is becoming more affordable, smartphone penetration in South Africa nonetheless remains low, and there is still scope for growth,” GfK said. “However, top brands are continuing to move out of the entry-level segment as the Chinese brands strengthen their grip on the market.”
Smartphone sales and revenues are likely to grow in double digits in 2018.
GfK data shows that there are now almost three times as many smartphones in use in South Africa than there are television sets. This suggests that brands should re-evaluate their marketing mix and allocate more budget to mobile, especially if their spending is largely focused on TV, it said. — (c) 2017 NewsCentral Media
