Growth of Smartphones Driving Factor in Decline of Consumer Electronics Purchases in Nigeria | Bizness Watch

Growth of Smartphones Driving Factor in Decline of Consumer Electronics Purchases in Nigeria


Mobile phones

Smartphones volume sales to increase by 27% to reach just under 8 million units sold

Multiple usages, better affordability and recovering higher disposable incomes drive growth of smartphones in 2017

The economic recession negatively affected sales of mobile phones especially feature phones, in Nigeria in 2016 causing total volume growth to weaken by 17%. The economy is, however, improving in 2017 as government revenue from crude oil sales has improved due to rise in crude oil global price, which has led to an increase in employment and disposable income. This is boosting the sale of mobile phones, particularly the smartphones which are more expensive and more in fashion than feature phones. More consumers are also likely to opt for latest versions of smartphones as mobile phone companies launch more eye-catching versions with bigger screens to meet consumer tastes.

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Danielle le Clus Rossouw – Senior Research Analyst Consumer Electronics

In urban areas, smartphones have become a must have a device for young people as they offer multiple functions, including internet browsing, video recording, video chats, and entertainment; they do not any longer have to rely on having a television set or regular electricity supply to be entertained. With the population of young people in urban areas growing well in Nigeria, demand for new smartphones is increasing by 27% in 2017.

In rural Nigeria, the increase in income level and cheaper and affordable smartphones for lower income groups who also crave smartphones benefitted the growth of smartphones. Meanwhile, feature phones are still highly prevalent because of its battery life and ruggedness, and many smartphone users still buy it as a backup phone. It is not uncommon for Nigerians to have two phones or more. Furthermore, demand for feature phones remains strong among many low-income consumers, particularly in rural areas amongst the elderly population who prefer to use feature phones. Feature phones are therefore continually relevant to consumers in Nigeria.

How smartphones influence the sales of computers and peripherals

Tablet retail volume sales grow by 1% in 2017 to 37,000 units

The availability of smartphones with larger screens and slim laptops available in the market is deteriorating the desire to own a tablet

How smartphones influence the sales of in-car entertainment

In-car entertainment is not considered a necessity in Nigeria, where smartphones are considered a good alternative.

Smartphones, despite being prohibited to use whilst driving, are frequently used for navigation purposes as it this is cost effective and multifunctional.

How smartphones influence the sales of imaging devices

Digital cameras see a 2% volume growth to 20,000 units in 2017

The significant demand for smartphones slows down the growth rate of digital cameras in 2017

The volume sale of camcorders has declined by a CAGR of 13% over the review period. The technological advancement of digital cameras and smartphones with convenience and portability has led to the decline of camcorder purchases.

The imaging device is expected to face further deterioration over the forecast period as consumers are becoming more money savvy, and would rather spend their money on smartphones which come out with high pixels.

Danielle le Clus Rossouw – Senior Research Analyst Consumer Electronics

With the growth of social media sites that heavily utilise photographs, sales of digital cameras are not seeing significant growth in line with the growing young population, who make the most use of these social media sites. Due to the growth of smartphones that can effectively provide sharp image photographs, and which are popular among young adults, this is likely to limit the performance of digital cameras used for personal use on social media.

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How smartphones influence the sales of portable players

E-readers are presently not available in Nigeria; the development of e-readers came at a time when smartphones became popular in Nigeria.

Portable media players’ growth declines by 3% retail volume sales to 6,000 units sold in 2017

Smartphones hinder the growth of portable media players due to it being a substitute product

Smartphones are seen as both an opportunity and threat to portable players in the forecast period. Forecast period CAGR volume sales see a declining growth of 3% for portable media players, as smartphones steal market share from portable multimedia players whose CAGR volume sales will decrease in the forecast period to 3%. Smartphones can be used for the same purposes, and more, compared to portable players. Wireless speakers will see forecast CAGR volume sales of 3% growth which is because wireless speakers can be used as a complement to smartphones.

How smartphones influence the sales of wearable electronics

The main buyers of smart wearables are the population over 40 years old with high incomes and those of the elderly population who have relatives earning high incomes, as well as expatriates in Nigeria. Members of the upper-income population segments are quite likely to own smartphones connected to the internet and so have the capability to utilise smart wearables.

It is expected that there will be an increase in smartphone users, which should impact positively on the growth of wearable electronics that are paired with the smartphones. Consumers are becoming more familiar with what smart applications can do. The number of consumers with smartphones and who are mobile-internet-connected has grown well over the review period and is expected to continue increasing due to a growing young population, which is more interested in using internet enabled devices for entertainment, news and research purposes. These consumers are also more health aware and so are more likely to spend more on health and wellness products such as wearable electronics.

Courtesy: Euromonitor

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