South Africans bought 3.2m smartphones in Q1

South African bought 3.2m smartphones in the first quarter of 2018, a 12.4% increase year on year, according to data released by market research firm GfK on Tuesday.

The value of the smartphone segment increased by 22.8% as sales of entry-level devices to low- and mid-income consumers continued to drive the market.

GfK South Africa’s data reveals that telecommunications retail enjoyed a strong start to the year, with revenue growing 22.4% year on year. Sales of traditional mobile phones continued to decline, however, down 1.6% year on year to around two million units for the quarter.

The growing popularity of phablets and higher unit prices (as a result of a weaker rand) helped to drive this increase in revenue against a backdrop of low or negative growth in many segments of the consumer technology market.

“The mobile device market showed good growth in the quarter, despite rising prices,” said Norman Muzhona, solutions specialist for telecoms at GfK South Africa in a statement.

“In addition to the exchange rate, the introduction of popular new mid-tier devices by several leading vendors helped to drive higher retail revenues in the telecoms market.”

GfK South Africa expects the migration from traditional mobile phones to smartphones to accelerate in 2018. However, it remains to be seen if the introduction of 4G-enabled, voice-over-LTE-ready feature phones will have any impact on the South African mobile phone market, Muzhona said.

IT retail revenues for the quarter contracted 4.8% compared to 2017, largely due to falling monitor prices and a 38.9% decline in tablet revenues. However, desktop computer revenues grew 39% and mobile computing revenues grew 6.5% year on year thanks to higher prices and increased sales of higher-end products.

New computing devices

“Retailers introduced new computing devices priced in the R3 000 band during the quarter and enjoyed surprisingly strong demand for these entry-level units,” said Berno Mare, GfK solutions specialist for IT, office equipment and value-added services.

“Telcos enjoyed robust growth in mobile computing retail sales, thanks to credit deals, subsidised contracts and attractive data offers. However, South African consumers are heavily indebted, which may dampen growth for the rest of the year.”

Sectors of the consumer electronics market that showed strong growth for the first quarter of 2018 included loudspeakers, where revenues were up 21.6% year on year thanks to demand of Bluetooth-enabled products, and ultra-high-definition (UHD) TVs, where revenues grew by a third due to to the growing affordability of the technology. UHD unit shipments were up 76%, while the average selling price of the products fell 24%.  — (c) 2018 NewsCentral Media