Intelligent CIO Africa Issue 03 | Page 12

TRENDING

Babatunde Afolayan, Senior Research Analyst at IDC West Africa.

The import of refurbished PCs, primarily from the UAE, UK, China, is proving particularly challenging for official channels, with such products comfortably outnumbering official shipments of primary PCs.“ At the same time, the volume of gray market imports is steadily increasing,” says Babatunde Afolayan, Senior Research Analyst at IDC West Africa.“ One of the main reasons is the lower price points at which resellers can purchase products from gray market sources, giving them better profit margins than official channels.”

The government is continuously trying to improve the country’ s economic performance and has implemented various strategies aimed at increasing the purchasing power of end users. Meanwhile, the Central Bank of Nigeria is considering the inclusion of IT products for interbank rates when it comes to accessing foreign currencies. IDC forecasts that this relatively flat growth in 2017 will be followed by a much stronger YoY increase of 59.9 % in 2018.

Official PC shipments to Nigeria have fallen 57.1 % YoY in 2016 to total 156,511 units, according to the latest figures compiled by IDC. This means the market has now fallen to its lowest levels since IDC started

Nigeria’ s currency, the Naira, has been losing considerable value against the US dollar for a number of years now. To make matters worse, the government excluded IT products from accessing foreign currencies at the interbank rate, pushing channel partners to obtain foreign currencies from the unofficial market, where rates are typically 40 – 50 % higher.

Both commercial and consumer end users have been prolonging their PC lifecycles beyond what is generally considered normal. And in cases where new purchases are being made, commercial end users are typically opting for cheaper models while consumers are increasingly opting for refurbished products. An additional challenge is that channel partners are no longer stocking units to meet future demand; PCs are now ordered on a needto-supply basis, and only after orders have been fully paid.

Africa’ s smartphone revolution is showing signs of a slowdown according to the latest figures compiled by IDC. The research firm says the continent’ s smartphone market totaled 95.37 million units in 2016. And while this is up 3.4 % YoY, it represents a considerable deceleration from the double-digit growth rates seen in the previous two years, with demand being hampered by the currency fluctuations that are affecting the continent.

Overall, 215.33 million mobile handsets were shipped in Africa during 2016, up 10.1 % on the previous year. However, it was feature phones that were largely responsible for this growth, with shipments increasing 16.1 % YoY in 2016 to total 119.97 million units. This growth saw feature phones increase their unit share of Africa’ s overall handset market from 53 % in 2015 to 56 % in 2016.

“ Africa has always been a tough market for mobile phone companies to crack, and in 2016 that challenge got even harder,” says Simon Baker, Programme Director for Mobile Devices at IDC CEMA.“ Many African economies struggled throughout 2016, and this had an inevitable knock-on effect on the smartphone market, which had previously experienced a very strong 2015. It was a particularly tough year in Nigeria, with the devaluation

Simon Baker, Programme Director for Mobile Devices at IDC CEMA. of the Naira causing a drop-in confidence in the distribution channel. And while North African markets saw an increase in overall handset shipments in 2016, the pace of growth slowed YoY due to exchange-rate fluctuations in Egypt and security issues in Algeria.”

Samsung continued to lead the

African smartphone market in 2016, largely through a reworked product portfolio that now includes more mid to low range models. However, at 28 million units, its 2016 smartphone shipments in Africa showed little growth from the figures recorded in 2015. The second-placed smartphone vendor was Transsion, widely known throughout Africa via its itel, Infinix, and Tecno brands. And in terms of feature phone shipments, Transsion comfortably outperformed its main competitors in 2016.

Chinese vendors have been showing more interest in the African market in recent quarters and expanding into new countries. However, this expansion strategy is delivering mixed results across the continent. Of the big international Chinese vendors, Huawei posted YoY shipment growth to remain as Africa’ s number-three smartphone vendor in 2016, while Lenovo saw flat growth and ZTE and Alcatel both suffered slight declines.

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