Mobile Phones in Nigeria

TRENDS

The economic recession negatively affected sales of mobile phones, especially feature phones, in Nigeria in 2016 resulting in the category declining by 17% in retail volume terms. However, the economy improved in 2017 as government revenue from crude oil sales improved due to a rise in global prices, which has led to an increase in employment and disposable income. This boosted the sales of mobile phones, particularly smartphones devices which are more expensive and are more in fashion than feature phones. More consumers are also likely to opt for the latest versions of smartphones as mobile phone companies launch more eye-catching versions with bigger screens to meet consumer tastes. Competition is also likely to increase with new entrants and as more products are launched. Companies such as Lenovo have already improved their competitive position since their entry in 2014, while Midcom Group made a bold entry into the Nigerian market with its Fero brand in 2016 and launched two smartphones devices in 2017, namely Fero Iris and Fero Royal A1. Consumers are also already anticipating the introduction of Samsung S8 and S8+, Tecno L9 and L9 plus, Infinix Note 4 specs and many more.

COMPETITIVE LANDSCAPE

Tecno was the leading brand in feature phones in 2017 with a retail volume share of 45%, which is due to its strong presence in both rural and urban areas, and its wide range of affordable brands such as the Tecno 349. Itel was the most dynamic brand in feature phones in 2017 with retail volume growth of 25%. This was due in large part to the performance of its Itel 2090 brand which benefited from consumers downtrading from more expensive brands such as Nokia and smartphones in light of the weak economy in 2016 and declining consumer incomes. It therefore benefited from growing demand among lower income consumers for cheaper phones.

PROSPECTS

Smartphones is expected to increase at a volume CAGR of 22% over the forecast period. Smartphones is set to grow in line with the rapid growth of the country’s network development and infrastructure investment, as telecom providers grow and as more young adults enter the formal workforce and earn higher disposable incomes, specifically as the economy recovers from the recession of 2016. It is also expected that demand will grow in line with competition among both telco providers to provide cheaper data and with competition among smartphones manufacturers.

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