Still clinging on to your feature phone? Well, if you hold on for a couple more years you might just be the proud owner of an ancient technological relic.
According to results from the International Data Corporation’s (IDC) ‘Q1 2015 Mobile Phone Tracker’, the purchase of feature phones in Middle East and Africa are sliding about 20% per year, and is pegged to be at only 27 per cent by 2019.
That space is naturally being filled by smartphones, as technology company figure out ways to make smartphones cheaper, smaller and more affordable. Smartphones accounted for 47 per cent of shipped units in Africa.
A lot of smartphones are making there way into more hands – a total of 155 million units are expected to be bought by the year’s end. That is a 66 per cent increase from last year.
One of the biggest factors that helped to bring more smartphones into the market is price, as almost half of smartphones shipped in Q1 in Africa were below the $100 mark, and 75 per cent were below $200.
“This price bracket seems to be the sweet point for most vendors launching in the region, as well as for established vendors looking to increase their shares by targeting the lower end of the market,” Nabila Popal, research manager for IDC’s Mobile Phone Tracker in the Middle East, Africa, and Turkey.
Andrew Fraser, former marketing manager for Sony Mobile in South Africa, agreed that price plays a huge a role in smartphone uptake.
“I think that this massive shift is merely a reflection of the price of entry level smartphones, we’ve seen prices drop to below $50 for these devices. The huge additional value that a smartphone provides for a nominally higher price than a feature phone makes it a savvy purchase for the consumer,” he told htxt.africa.
“In theory this should be good news for operators, as smartphones in general deliver higher Average revenue per user (ARPU) than feature phones due to their multi-functional nature. History seems to indicate that, because of higher data usage by apps, that data usage should drive revenues for the operators,” Fraser said.
However, Fraser says that while smartphone market growth should be great for operators in theory, the fact that many consumers in the Middle East and Africa use data-bundles rather than contracts means they use less data.
“I think the truth is more nuanced, and anecdotal evidence seems to indicate that many of the users of these low end devices don’t have any kind of data plan, or are using small daily-use data bundles. This is likely because the cost of mobile data is high, and it is seen as a very expensive luxury. So these low-end users are using the functions of their smartphone, but often only when connected to WiFi,” he said.
“This is a great threat to the operators, especially when over-the-top players like Whatsapp, Facebook and WeChat offer services that mimic that of some of the networks’ core revenue streams (i.e.voice calls and messaging),” Fraser concluded.
[Image – CC by 2.0/Rafe Blandford]