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Mobile phones

Trends

The retail environment for mobile phones in South Africa continues to see transformation, as cheaper versions of smartphones enter the market, and as the costs to access the internet continue to decrease as mobile phone operators continue to fight for share across the country. One of the leading telecommunications operators, MTN, recently introduced a cheaper version of smartphone called the MTN STEPPA during 2014. The smartphone is positioned as offering basic features which consumers need, whilst at the same time excluding features deemed less relevant and basic. The price is fair when considering the screen size is 3.5” and the phone supports the most common applications, which include the most widely used WhatsApp across South Africa.

Competitive landscape

Nokia South Africa continued to lead mobile phones in volume terms in 2013, with a 32% share. The company’s share, however, continued to see an overall decline, as consumers shifted to brands such as Samsung, which saw strong growth over the last two years, in line with its increased investment in innovation, as well as brand promotion across South Africa. Nokia, however still led in 2013 due to its pricing, which sees most of its smartphones selling at relatively low unit prices when compared with mainstream mobile phone brands such as Samsung, LG, Sony and many others.

Prospects

Smartphones is expected to drive retail volume growth in mobile phones over the forecast period. Growth is expected to be stimulated by the continued introduction of cheaper smartphones to the market, which will result in decreased demand for feature phones across the country. Smartphones is expected to post a retail volume CAGR of 16% over the forecast period.