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Cape Town - Lower-priced smartphones are driving growth in the Middle East and Africa, latest research suggests.
According to data from International Data Corporation (IDC), smartphones in the $100 to $200 (roughly R1 250 to R2 500) price category showed the most robust growth in the region and are expected to see expansion of 66% in 2015.
Phones priced at $100 or lower made up nearly half (45.1%) of all shipments in the region in the first three months of this year, while phones under $200 accounted for 75%.
"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," said Nabila Popal, research manager for IDC's Mobile Phone Tracker in the Middle East, Africa and Turkey.
The region is expected to grow to 155 million units this year as Android continues to dominate and feature phones face further declines of 20% year-on-year.
Pricing strategy
In Africa, Android phones which are generally cheaper than iPhones account for 89% market share versus Apple's device at 7%.
The IDC found that BlackBerry continued to see acute declines, despite launching a number of devices including the Passport, Leap and Classic.
"The loss of the corporate segment, spurred by the continued uptake of bring-your-own-device policies among the region's enterprises, has had an adverse effect on BlackBerry's performance in the market," said Isaac T Ngatia, a senior research analyst at IDC.
Samsung's premium Galaxy range is struggling because of market competition from cheaper devices. (Duncan Alfreds, Fin24)
The research reinforces the strategy of international and local players who have focused on the mid-tier segment rather than seeking to compete with premium devices like the Samsung Galaxy S6, iPhone 6 and Sony Xperia Z3.
"We endeavour to continuously introduce more feature-packed devices to the market at affordable prices. Most of the big brands have moved away from the sub R2 000 market - we plan to increase our range in this space and robustly fill this large gap," Mobicel founder Ridhwan Khan told Fin24 recently.
The local company's flagship Mobicel Air smartphone sells for R3 499, significantly cheaper than some international rivals.
"We also have devices up and down the price spectrum. Our niche is devices that are better specced, better priced, extremely good-looking devices and with a large focus on value-add in the box (our consumers receive value add elements such as car chargers, limited edition earpieces, phone covers and power banks free together with the device).
"We also have the ability to make our devices according to the needs of our consumers," said AG Mobile CEO and founder Anthony Goodman.
Top vendors
The company recently launched its new Ghost smartphone which is presented with a free cover, car charger and power bank. Goodman said that the extras differentiate the company from rivals in the mid-tier segment.
The IDC found that Nigeria and SA are the two strongest markets in Africa accounting for growth of 135% and 56% respectively.
The three leading vendors, Samsung, Tecno and Apple, accounted for 55% of all sales in Africa in the first quarter, the IDC research found.
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