Smartphones4.09.2023

South Africa’s feature phones here to stay until smartphone prices drop

While feature phone sales and revenue are declining globally, South Africa still has a large market for these devices, primarily due to their affordability.

That is based on feedback from the country’s biggest mobile networks and stores that sell feature phones.

Smartphones have grown in popularity on major mobile networks in South Africa, but there are still many feature phones on the market.

Unlike smartphones, feature phones retain the form factor of original cellular phones — with physical buttons and a non-touch display. They also often can’t connect to the Internet.

MTN South Africa told MyBroadband it observed a decline in feature phone sales in 2023, which was in line with global market trends.

“There has been a shift from feature phones to entry-level smartphones,” MTN said. “This can be attributed to more affordable entry-level smartphones, which now can cost as little as R399.”

MTN said the continuing decline of voice and SMS traffic could be partially attributed to the increase in smartphone penetration.

However, the operator acknowledged that price considerations meant demand for feature phones remained.

Nokia, Mobicel, Itel, and Stylo were among the popular feature phone brands on MTN’s network.

Telkom told MyBroadband that the ratio of feature phones to smartphones on its network had always been low.

“In line with Telkom’s data-led strategy, we only sell smartphone devices and do not range or sell any feature phone devices in any of our owned and operated channels,” Telkom said.

However, the operator does have subscribers using feature phones bought through various independent channels.

Telkom said voice traffic was one indication of feature phone usage on its network.

“These customers may either be using a feature phone or a smartphone without consuming any data.”

Nevertheless, it has observed a decline in feature phones on its network in the past five years.

Telkom expects a significant driver in the decline of feature phone sales will be when mobile networks drop support for 2G and 3G networks, which the government plans to demand they do in the next few years.

Top feature phone brands active on Telkom’s network are Nokia, Stylo, Itel, Quest, and Mobicel.

Major retailer singing a different tune

But Southern Africa’s largest brand store — Pep — had a slightly different take on the feature phone market than MTN and Telkom.

The affordable clothing retailer is a major seller of feature phones and entry-level smartphones, acting as the primary source of many of the former models.

Pepkor head of Cellular, John Edwards, told MyBroadband that the retailer has seen feature phone sales increase in recent years, contrary to the mobile networks’ experience.

“The feature phone market in South Africa is alive and well as it services the critical need of our customers for contactability,” Edwards said.

“This year, we estimate that over 5 million feature phones will be sold in South Africa, and the market is growing year on year.”

Edwards said before the Covid-19 pandemic struck, the feature phone market was shrinking as the price gap between smartphones and feature phones was narrow, with smartphones selling for as low as R349.

“During the pandemic, this trend accelerated, and there was a huge demand for smartphones as customers relied on them for schooling, entertainment, and information,” Edwards said.

However, in the time following the pandemic, the trend has reversed, and Pep’s feature phone unit sales have been growing year on year while smartphone sales were shrinking.

“The average feature phone sells for less than R200 while the average smartphone is nearer to R1,000 — our customers simply cannot afford it,” Edwards said.

At the time of publication, the cheapest feature phone available from Pep’s online store — the Stylo Africa — cost R159, well below half the R399 price of the most affordable smartphone — the Mobicel Berry 2.

The latter’s spec sheet lists a 5-inch 480 x 854 VGA display, 512MB RAM, a 2,000mAh battery, and a 5MP rear camera.

Mobicel Berry 2

Edwards blamed rising smartphone prices on newer versions of Android requiring more memory, which raised the cost of device production.

The Mobicel Berry 2 runs on a trimmed-down version of Android 9.0 Pie, first released in 2018.

He also speculated that high levels of crime experienced by Pep’s customers contributed to feature phone sales.

“In surveys, our customers mention that although they may own a smartphone, they travel to and from work with a feature phone as it is easier to replace if stolen,” he said.

Edwards also suspected the prevalence of load-shedding factored into concerns around battery life and charging.

Feature phones generally have superior battery life due to running less demanding applications.

In addition, feature phones are cheaper to use as they often do not consume data in the background and are cheaper to repair when damaged.

“The demand for feature phones remains strong, and all other things being equal, they will be with us for many years still,” Edwards said.

While brands were less of a concern for buyers interested primarily in a low price, Edwards said Pep’s best-selling feature phone brands were its in-house Stylo and Premio brands as well as Nokia, which still produces the “ever-popular” Nokia 105.