Africa is witnessing a mobile phone upgrade cycle moment. The obvious trend has been that of feature phones losing significant market share as millions of users migrate to entry-level smartphones in a rush to access mobile internet, e-commerce, social media and government services.
While this mobile adoption trend concentrates solely on sub-$100 (R1 600) entry-level prices, the latest growth cycle, however, shows a different kind of adoption.
More Africans are now opting for premium and “premium-lite” models that offer stronger cameras, faster processors and larger storage at mid-range prices, up to $500 (R8 000).
The trend is fuelled by rising device financing for both entry level and mid-range smartphones, and as more low-cost devices with premium features begin to flood the market.
“Owning better specced smartphones has become easier due to increased competition, largely driven by Chinese handset makers. At the same time, handset credit deals with flexible and affordable instalment plans are on the rise,” Joan Wanjau, a beneficiary of the device financing programme, said.
Over the past five years, Wajau noted that a range of device financing models have emerged in Kenya and across Africa to expand smartphone access among underserved populations. One is the buy-now, pay-later model, where users make an initial down payment and settle the balance in instalments over a defined period. It leverages credit-scoring algorithms that assess creditworthiness using usage behaviour and bill payment histories.
Another is the pay-as-you-go (Paygo) model, which provides devices with minimal credit checks and leverages embedded device-locking technology to manage payment default risk.
“These instalment payment plans are making handsets more affordable, with costs varying depending on the smartphone model and the financing scheme selected.
“In some cases, daily payments can be as low as less than one dollar. However, on Paygo platforms, any default in payments results in the device being locked and only reactivated once the outstanding amounts are cleared,” Wanjau explained.
Pioneer device financing programmes include Lipa Mdogo Mdogo, introduced by Safaricom in Kenya in 2020, and Easy2Own, rolled out by Vodacom in South Africa in 2021 to open financing for entry-level and mid-range smartphones.
E-commerce platforms like Jumia and asset financiers such as Mogo and Watu Africa, where the latter funds major brands such as Apple and Samsung, have also ventured into this space to scale these programmes in the continent.
Data from market intelligence firms Omdia and Counterpoint Research highlights the growing affordability of smartphones in Africa, reflected by higher shipment growth numbers.
According to Omdia, annual smartphone shipments grew by 24% to 22.8-million last year, driven by cheaper smartphones.
“Africa delivered an exceptional dual surge in Q3 – sub-$100 smartphones climbed 57%, their fastest rise in three quarters, while those above $500 grew 52%,” said Omdia principal analyst Manish Pravinkumar.
The entry-level tier, Pravinkumar said, was driven by established Chinese brands like Transsion (maker of Tecno, Itel, Infinix) that shipped 9.3-million handsets, posting a 25% year-on-year growth driven by demand across Algeria, Egypt, Morocco, Nigeria, Kenya and South Africa. Transsion controls 51% of all mobile phone shipments in Africa.
Another Chinese handset maker, Xiaomi has strategically positioned itself as a youthful brand, helping them leverage digital opportunity with premium lite features and low-priced devices. It recorded the largest growth rate at 34% to send in 2.2-million handsets.
Xiaomi is now ranked third with 13% market share, just behind Samsung with 15% market share. – bird story agency
