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April 22, 2022

Nigerians opt for used phones as global smartphone shipment drops by 11%

By Upfrontdigital News 0 283 Views

By Adeyemi Adepetun

SMARTPHONES shipment across the various markets fell by 11 per cent in quarter one (Q1 2022) owing to ‘unsettled business environment’ fuelled by spikes in covid cases due to the Omicron variant, vendor uncertainty due to the Russia-Ukraine war, China’s resurgent lockdown policy and the implications of inflation around the world.

Analysts at Canalys, which revealed this, reckoned that the component shortage situation might improve ‘sooner than expected’, which would alleviate things somewhat.

Indeed, the impact of this challenge is being felt across the globe, especially inflation and harsh economic situations take centre state across the economies. For instance, it was gathered that more Nigerians are fast settling for refurbished or used mobile devices, especially the smartphones.

Some vendors confirmed this and hinged the development on low and poor purchasing power of Nigerians due to slow economic growth in the country.

Obi Nwankwo, a major phone dealer at the Computer Village, Ikeja, confirmed that that there have been huge drop in the manner at which people purchase new phones, especially in the last two years.

Nwankwo, who put drop in the purchase of new smartphone at about 65 per cent in the last two years, noted that pre-COVID, purchases of new devices were around 85 per cent.

“But it is not the same anymore! The market trend showed that people will rather stick to their old phone, even when there are cracks on it, or it is malfunctioning, rather than buying another one. Better still, some buy used or refurbished ones. That is the new trend now.”

Another vendor, who preferred anonymity, said the economy, which he described as moving at snail-speed, has created huge problems both for vendors and buyers.

According to him, “the Nigerian economy is facing very big challenges, and it is obvious because the prices of phones have increased and the demand for smartphones has drastically reduced. Before now, our consumers normally will change their phones at least twice a year, but everything has changed now. Consumers now want more affordable phones. The economic recession, lack of forex and policy summersault has affected our sales; consumers now go for feature phones and smartphones between the range of N25, 000 and N30, 000. Even to pay for N30, 000 smartphone, some customers want to pay in phases.”

A customer, Taiwo Ibidapo, confirmed that it has become extremely difficult to purchase new devices because of low income and poor purchasing power.

“Before now, I change my phones at least every two years, but I have maintained the ones I have in the last five years. Things have really gone bad. People either stick to the ones they have been using or go for refurbished/used phones.”

MEANWHILE, analysts from Canalys noted that in terms of market share for the top five smartphone vendors, Samsung tops the list with a 24 per cent share (up from 19 per cent in Q4 2021) Apple came second with 18 per cent (up from 15 per cent), Xiaomi had 13 per cent (down from 14 per cent), Oppo 10 per cent (down from 11 per cent) and Vivo 8 per cent (down from 10 per cent).

Canalys Analyst, Sanyam Chaurasia, said despite the looming uncertainty in global markets, the leading vendors accelerated their growth by broadening device portfolios for 2022.

IN another development, research from analyst firm, Counterpoint, said the global refurbished smartphone market grew by 15 per cent in 2021.

Counterpoint claimed that refurbished or ‘secondary’ smartphone market experienced solid growth last year due to a rising interest in sustainability, awareness of the sub-market, certified pre-owned alternatives, and an increase in quality checks and warranty options.

Senior Analyst, Glen Cardoza, said refurbished smartphones are a part of overall pre-owned devices which re-enter the system through various routes.

“Trade-ins are the fastest growing source for such pre-owned smartphones, the volume of which grew more than 10 per cent globally in 2021. We are seeing a Year-on-Year (YoY) increase in volumes among refurb players in developing markets like China, India, Latin America, Southeast Asia and Africa. These markets will grow more as they have many unorganised businesses and a large rural demographic yet to be captured. ASPs (average selling prices) of refurbished smartphones increased marginally as 4G devices still retained value.”

The Counterpoint analysts noted that sustainability may well play a large factor into a decision to pick up a refurbished smartphone, “and you don’t have to be an activist for that sort of thing to think its generally a good idea to reused things where possible. However another contributing factor may well be the increasing cost of flagship phones particularly from Apple, and the fact that a general slow down in hardware innovation means there isn’t as much to tell phone generations apart as there once was.”

 

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