Africa’s smartphone revolution is showing signs of a slowdown according to the latest figures compiled by International Data Corporation (IDC).
The global technology research and consulting services firm says the continent’s smartphone market totaled 95.37 million units in 2016. And while this is up 3.4% year on year, it represents a considerable deceleration from the double-digit growth rates seen in the previous two years, with demand being hampered by the currency fluctuations that are affecting the continent.
Overall, 215.33 million mobile handsets were shipped in Africa during 2016, up 10.1% on the previous year. However, it was feature phones that were largely responsible for this growth, with shipments increasing 16.1% year on year in 2016 to total 119.97 million units. This growth saw feature phones increase their unit share of Africa’s overall handset market from 53% in 2015 to 56% in 2016.
“Africa has always been a tough market for mobile phone companies to crack, and in 2016 that challenge got even harder,” says Simon Baker, program director for mobile devices at IDC CEMA. “Many African economies struggled throughout 2016, and this had an inevitable knock-on effect on the smartphone market, which had previously experienced a very strong 2015. It was a particularly tough year in Nigeria, with the devaluation of the naira causing a drop in confidence in the distribution channel. And while North African markets saw an increase in overall handset shipments in 2016, the pace of growth slowed year on year due to exchange-rate fluctuations in Egypt and security issues in Algeria.”
Samsung continued to lead the African smartphone market in 2016, largely through a reworked product portfolio that now includes more mid- to low-range models. However, at 28 million units, its 2016 smartphone shipments in Africa showed little growth from the figures recorded in 2015. The second-placed smartphone vendor was Transsion, widely known throughout Africa via its itel, Infinix, and Tecno brands. And in terms of feature phone shipments, Transsion comfortably outperformed its main competitors in 2016.
Chinese vendors have been showing more interest in the African market in recent quarters and expanding into new countries. However, this expansion strategy is delivering mixed results across the continent. Of the big international Chinese vendors, Huawei posted year-on-year shipment growth to remain as Africa’s number-three smartphone vendor in 2016, while Lenovo saw flat growth and ZTE and Alcatel both suffered slight declines.
“Price competitiveness has become a key issue in many African markets,” says Ramazan Yavuz, research manager for mobile devices in Africa at IDC CEMA. “To grow significantly in these markets, vendors have to be able to address the continent’s large low-income population by providing phones that are priced very competitively. As such, global vendors are cautious of the lower-priced Chinese brands now entering the market and are keeping a close eye on them.”
3G handsets continue to account for more than half of all new smartphone shipments in Africa, although 4G devices saw year-on-year growth of more than 50% in 2016. IDC is predicting that 4G handsets will account for more than half of new smartphone shipments in Africa by 2018, as prices for entry-level 4G phones drop and the number of 4G networks across the continent grows. For example, Egypt saw the launch of a major 4G network towards the end of 2016, and more countries are set to follow suit in 2017.
Personal computing devices sales still decline in MEA
The Middle East and Africa (MEA) personal computing devices (PCD) market, which is made up of desktops, notebooks, workstations, and tablets, suffered a decline of -7.3% year on year in Q2 2017, according to the latest insights from International Data Corporation (IDC).
The global technology research and consulting firm’s Quarterly PCD Tracker for Q2 2017 shows that PCD shipments fell to around 6 million units for the quarter.
“As forecast, the market followed a similar pattern to recent quarters, with the downturn primarily stemming from a decline in shipments of slate tablets and desktops,” says Fouad Charakla, IDC’s senior research manager for client devices in the Middle East, Turkey, and Africa. “This was the result of desktop users increasingly switching to mobile devices such as notebooks or even refurbished notebooks, while users of slate tablets shifted to smartphones. These trends translated into year-on-year declines of -21.9% for desktops and -15.7% for slate tablets in Q2 2017, while shipments of notebooks and detachable tablets increased 11.0% and 63.3%, respectively over the same period.”
“Market sentiment in the region remained low overall, although an aggressive push from some slate tablet vendors meant the market declined much slower than expected,” continues Charakla. “At the same time, heightened competition has also made it harder for certain players to sustain their slate tablet businesses and generate profits, causing them to lose interest in the slate tablet market altogether. Despite this, slate tablets are still the most popular computing device among home users in the region.”
Looking at the region’s key markets, IDC’s research shows that when compared to Q2 2016 overall PCD shipments were down -11.4% in the UAE, -8.9% in Turkey, and -6.7% in the ‘Rest of Middle East’ sub-region (comprising Iran, Iraq, Syria, Yemen, Palestine, and Afghanistan). South Africa and Saudi Arabia bucked this trend, recording year-on-year increases of 3.5% and 9.6%, respectively.
A massive education delivery in Pakistan acted as a key driver for notebook shipments in the region overall. Similarly, the education sector was the biggest driver of detachable tablet shipments, triggered by a huge delivery in Kenya, as well as two other deliveries in Pakistan and Turkey, which enabled this category to achieve the fastest growth of all the PCD categories.
“While a component shortage prevented market players from reducing their prices too much, the average price of consumer notebooks experienced a considerable year-on-year decline in Q2 2017,” says Charakla. “This played a key role in driving demand from the consumer segment, and was reflected in the growing popularity of lower-priced notebook models.”
Looking at the PC market’s vendor rankings, each of the top five vendors maintained their respective positions compared to the previous quarter, with the top four all gaining share.
Middle East & Africa PC Market Vendor Shares – Q2 2016 vs. Q2 2017
|Brand||Q2 2016||Q2 2017|
Although Samsung continued to lead the tablet market, the vendor rankings in the space saw quite a few changes, with Huawei catapulting itself to second place. Lenovo also climbed up a position compared to the previous quarter, causing Apple to drop to fourth place.
Middle East & Africa Tablet Market Vendor Shares – Q2 2016 vs. Q2 2017
|Brand||Q2 2016||Q2 2017|
“Looking to the future, the MEA PCD market is expected to decline at a faster rate than previously forecast for 2017 as a whole,” says Charakla. “Technological shifts are playing a pivotal role in deciding the future of this market, with demand for certain products shifting to other PCD products and beyond (i.e., smartphones). Accordingly, shipments of slate tablets are expected to continue declining over the coming years as demand is cannibalized by smartphones. Meanwhile, the ongoing shift to mobile computing will see growth in the desktop market remain close to flat throughout IDC’s forecast period ending 2021. Notebook shipments will experience very slow growth beyond 2018, while detachable tablets will remain the fastest growing PCD category, eating away share from other computing devices.”
Gazer cyber-spies exposed
ESET has released new research into the activities of the Turla cyberespionage group, and specifically a previously undocumented backdoor that has been used to spy on consulates and embassies worldwide.
ESET’s research team are the first in the world to document the advanced backdoor malware, which they have named “Gazer”, despite evidence that it has been actively deployed in targeted attacks against governments and diplomats since at least 2016.
Gazer’s success can be explained by the advanced methods it uses to spy on its intended targets, and its ability to remain persistent on infected devices, embedding itself out of sight on victim’s computers in an attempt to steal information for a long period of time.
ESET researchers have discovered that Gazer has managed to infect a number of computers around the world, with the most victims being located in Europe. Curiously, ESET’s examination of a variety of different espionage campaigns which used Gazer has identified that the main target appears to have been Southeastern Europe as well as countries in the former Soviet Union Republic.
The attacks show all the hallmarks of past campaigns launched by the Turla hacking group, namely:
- Targeted organisations are embassies and ministries;
- Spearphishing delivers a first-stage backdoor such as Skipper;
- A second stealthier backdoor (Gazer in this instance, but past examples have included Carbon and Kazuar) is put in place;
- The second-stage backdoor receives encrypted instructions from the gang via C&C servers, using compromised, kegitimate websites as a proxy.
Another notable similarity between Gazer and past creations of the Turla cyberespionage group become obvious when the malware is analysed. Gazer makes extra efforts to evade detection by changing strings within its code, randomizing markers, and wiping files securely.
In the most recent example of the Gazer backdoor malware found by ESET’s research team, clear evidence was seen that someone had modified most of its strings, and inserted phrases related to video games throughout its code.
Don’t be fooled by the sense of humour that the Turla hacking group are showing here, falling foul of computer criminals is no laughing manner.
All organisations, whether governmental, diplomatic, law enforcement, or in traditional business, need to take today’s sophisticated threats serious and adopt a layered defence to reduce the chances of a security breach.