Price of smartphones fall by half, says report
Fallen. The price of smartphones has fallen by half in the last three years. PHOTO EDGAR R BATTE
What you need to know:
- Mr Joseph Lutwama, head of business environment Financial Sector Deepening Uganda, said there is reluctance to embrace mobile money payments as a payment option.
The average price of smartphones has fallen by more than half in three years, a report indicates.
According to a Jumia Mobile Report 2019, increase in smartphone penetration has triggered a drop in the price of smartphones over the years.
“In 2014, Jumia recorded the average price of a smartphone at$165 (Shs609,906) a value that dropped by more than 50 per cent in three years,” the report reads in part, revealing that the current average price for a smartphone is $82 (Shs303,104).
Smartphone penetration, ranked at 36 per cent within Africa, is representative of 255m smartphone devices.
According to the report, an influx in smartphone makers has created stiff competition in the market with China dominating.
China based smartphone company, Tecno has been the leading choice for smartphones by users since 2016, followed by Samsung, Infinix, Nokia and Apple.
Mr Neville Igasira, head of business development at Jumia Uganda, said Tecno has the highest demand in Uganda because of their cheap price.
“Tecno is highly bought mainly because of the price points of their phones, they have majorly entry level smartphones which have made them sell more in our market,” he said.
Mobile subscription penetration in Uganda is currently estimated at 80 per cent with 23m subscribers.
Mobile phones, the report indicates make up the highest sales portfolio in regard to number of items sold and revenue generated, especially in Kampala, Entebbe and Wakiso.
The report also notes that 79 per cent of the traffic on the online sales are derived from mobile devices, with 54 per cent from mobile internet while 25 per cent is from mobile application.
Twenty one per cent comes from desktop computers, and the trend of using mobile devices for online shopping is expected to soar based on the increased smartphone penetration.
Low mobile money usage
However, the preferred mode of payment for customers even while using smartphones remains cash.
“Six per cent of the transaction are done through mobile money and 95 per cent through other payment methods, especially cash,” the report notes.
Mr Joseph Lutwama, head of business environment Financial Sector Deepening Uganda, said there is reluctance to embrace mobile money payments as a payment option.
He said, the cost incurred when customers pay using mobile money is an inhibition.
“It goes back to the value I attach to convenience. The value I attach to a convenience will determine how much am willing to pay,” he said, adding that the security aspect attached to cash vis-a-vis virtual money payments distracts Ugandans from mobile money.
EA comparison
Uganda, according to the report, lags behind its counterparts in East Africa, especially Kenya and Tanzania when it comes to the using mobile money with $19.7b mobile money transactions recorded last year.
