Going Smart The Emerging Smartphone Market, the Driving Force Behind

Economic trends demonstrate that Ethiopia is going the way of smart phones. Increasingly smartphones are becoming popular among the public as economic growth becomes more robust. Yet, what does the trend towards smart phones really mean for Ethiopia’s economy? Are these devices merely status symbols or are they indicative of larger socio-economic trends?

The previous wave of mobile phone adaptation in Ethiopia, especially in urban areas, has been accelerated at an impressive annual growth rate powered by affordable dump and feature phones that are sold in the market. This narrative, however, is currently changing.

Today, the market trend in Addis Ababa shows that the urban population is starting to embrace the move to smartphones. Unlike the previous days, now it is becoming common to see people with their touch screen smartphones almost everywhere. Mobile phone retailers located in different corners of the city also validate the emergence of smartphone market. 

Eyob Argaw, 37, has been in the business of selling mobile phones for the last seven years and says he’s been noticing this trend: “Unlike today, most of the phones I displayed two years ago were feature phones,” he said. “These days, however, 85Pct of the mobile phone available in my shop are smartphones.” 

Similar glimpse of the different mobile phone markets in different locations of the city is enough to conclude that mobile phone sellers are starting to incline towards displaying more and more smartphones than feature phones. What drives the growing smartphone market, however, is puzzling.

The key drive for such a change in most sub-Saharan African countries was price with numerous elements combing to drive down the cost of buying smartphones. The existence of relatively low tax rate in countries like Kenya and Tanzania, which is less than 5Pct, played a critical role to increase the smartphone penetration rate close to 16Pct.

Even if it is difficult to estimate the number of smartphones operating in Ethiopia, the World Bank estimates that the addressable market for smartphone users in Africa is currently growing at 19Pct each year. 

There are already close to 100 million smartphone users in Africa with the number set to double within the next four years. Smartphone manufacturers such as Samsung, Apple, Blackberry, Huawie and ZTE dominate the market while a new entrant, Techno Smart, which assembles Smartphone locally, is striving to catch up.

Although close to 35Pct tax is levied on imported mobile phones, smartphones can be bought with the range of 1,750 birr to 15,000 birr, according to EBR’s market assessment. The same assessment also reveals that, the average smartphone price stood around 8,000 birr. Products of Samsung and Iphone cost higher than smartphones imported from China. In order to drive the market, however, the average price of smartphones should be comparable with the disposable income and per capital income of the country, according to Ashenafi Tesfaye, a market analyst at BET Consulting Plc. 

Although Gross Domestic Product (GDP) growth has remained high, per capita income in Ethiopia stood at USD410, which is among the lowest in the world, according to the World Bank’s 2013 estimate. Average  disposable monthly income is also estimated at 10Pct of monthly salary in urban areas, which is not enough to purchase luxury items like smartphones. 

Helen Assefa, 33, a secretary by profession currently own Samsung Galaxy S4 smartphone. “If it was not for the kindness of my fiancé, who currently lives in United Kingdom, owning a smartphone will remain to be just a dream,” she said. Her 3,000 birr gross salary monthly is not enough to buy one. 

This shows that the growth of the upper- and middle-class societies also drive the smartphone market, says the market analyst. Although few studies have been conducted on Ethiopia’s rising upper class society, according to the survey conducted on 1,000 households in Addis Ababa by Boston Consulting Group in 2012, 10Pct of the household in the city earns more than USD1,000 per month. Those who earn more than USD500 are also estimated to reach 22Pct of the total 700,000 household in Addis Ababa.

 Ashenafi noted that in such economies that has a potential for the growth of upper- and middle-income class societies, local telecom companies and mobile apparatus assemblers will find ways to sell phones with relatively cheaper price in order to position themselves at the centre of the market when the economy picks. “The competition among companies ultimately will drive the average price of smartphones down” he adds.

Although in small scale, this trend has started to emerge in Ethiopia. Recently, Tecno Mobile released locally assembled smartphones. It is such a trend that motivates Yohanes Tamiru, 30, who is a civil engineer and earns 15,000 birr net salary monthly. “Although my income is relatively better, I decided to buy a smartphone only after I found out that a local company has started to assemble a relatively cheaper smartphone six months ago,” Yohannes, who bought Tecno T3 model smartphone with 6,500 birr, told EBR.

Yet, it is not only price that drives the smartphone market. A distinct and unique features of smartphones also matters especially for the younger age group and professionals with appetite for new technologies. “One of the interesting feature about my phone is I can talk to my fiancé whenever I want through the applications installed such as Viber and Skype,” Helen noted. 

Professionals like Yohannes use smartphones to facilitate their work: “Since my boss frequently travels, I use my smartphone to update him about the work progress using e-mail, Viber and Skype wherever I am. I also browse different site to update myself.” 

However, not all the driving factors for smartphone market growth are quantifiable. “Some of the owners of smartphones might be those who are in need of status regardless of their income,” Ashenafi argues.

With the coming of these smartphones armed with powerful applications, it might be safe to assume that it could cause harm to the country’s sole state owned telecom service provider, Ethio - telcom, by reducing its revenues. However, an official of the company says that isn’t the case for Ethio-telecom. 

“We haven’t experienced any negative implications on our revenue following to the arrival of smartphones,” says Abdurahim Ahmed, Ethio telecom’s Corporate Communication Head. According him, the company is currently charging people who are making calls using different Apps as regular internet users. As of June 2014, close to 26 million mobile and 4.5 million internet subscribers are found in Ethiopia. 

But not everybody use smartphone efficiently. “Although smartphones are making life easy by creating easy means of communication, they are not efficiently used,” Elias Worku, Information Technology lecturer at Addis Ababa University told EBR. “Some are not even aware of the basic features their phones have.” 

Indeed, most of smartphone users EBR approached only use some of the basic applications such as Viber. 

For instance, Helen is not even aware of most of the applications installed on her phone. Her Samsung Galaxy S4 smartphone has an application that enables her to track her daily exercise and diet levels as well as an application that allows her phone to be used to remotely control most electronic devices such as her television set.

Despite the strong smartphone market growth, experts agree that limited access to mobile data services will continue to be the greatest obstacle for the emerging smartphone market in Ethiopia.

2nd Year . August 2014 . No.17


  • Rodgerpielp

    levitra for sale philippines
    buy levitra online
    buy cheap levitra online
    levitra online
    cheapest levitra super active oo

    Rodgerpielp Sunday, 22 October 2017 05:44 Comment Link
  • testt

    educator, Sue. Although Sue had a list of discharge instructions in her hand, she paused and

    testt Friday, 20 October 2017 16:14 Comment Link
  • hifu review cambridge therapeutics

    You're so interesting! I don't suppose I've truly read through something like this before. So nice to find someone with a few unique thoughts on this subject matter. Really.. thank you for starting this up. This web site is something that is required on the web, someone with a little originality.

    hifu review cambridge therapeutics Thursday, 19 October 2017 17:58 Comment Link
  • Jorgelar

    sildenafil sandoz 100 mg tabl. 8x
    buy viagra online
    where to buy generic viagra online
    viagra prices
    cialis viagra levitra price

    Jorgelar Thursday, 19 October 2017 07:33 Comment Link
  • MatthewBlite

    order cialis and viagra
    generic cialis at walmart
    buy brand name cialis online
    cialis online
    buy cialis dapoxetine

    MatthewBlite Wednesday, 18 October 2017 16:24 Comment Link
  • Davidram

    cheap canadian cialis online
    cialis cost
    cialis tablets for sale australia
    cost of cialis
    cialis 2.5mg pills

    Davidram Sunday, 15 October 2017 23:52 Comment Link
  • JoshuaErano

    where to buy cialis in toronto canada
    canadian cialis
    how do cialis pills look like
    cost of cialis
    cheap non prescription cialis

    JoshuaErano Sunday, 15 October 2017 13:11 Comment Link
  • Stevenabelp

    acquisto viagra generico in contrassegno
    viagra tablets
    buy viagra in new york
    buy generic viagra
    150 mg of viagra

    Stevenabelp Saturday, 14 October 2017 16:18 Comment Link
  • Marionmum

    how to buy pfizer viagra online
    viagra without a doctor prescription
    cheap viagra super force
    where to buy viagra
    can buy viagra australia

    Marionmum Saturday, 14 October 2017 04:59 Comment Link
  • Wilmerlab

    comprar viagra online peru
    viagra online
    viagra sale online uk
    online viagra
    viagra buy online forum

    Wilmerlab Friday, 13 October 2017 15:45 Comment Link

Leave a comment

Make sure you enter the (*) required information where indicated.Basic HTML code is allowed.

Latest News

Ethiopia to Host the 4th International Coffee Conference

Ethiopia to Host the 4th International Coffee Conference

Ethiopia is set to host the 4th International Coffee Conference from March 6 – 8, 2016 in Addis Ababa at the United Nations Conference Center. Previous conferences were held  in England in 2001, Brazil in 2005 and Guatemala in 2010. Read more


UAE-backed Egyptian forces arrive in Eritrea... https://t.co/dLEQRWD78l

ሰበር ዜና ብሄራዊ ባንክ ከነገ ጀምሮ የብር ምንዛሪ ተመንን በ15% እንዲገሽብ ውሳኔ አስተላለፈ፡፡ በተጨማሪም የገንዘብ ማስቀመጫ ወለድን ከ5% ወደ 7% ከፍ እንዲል ውሳኔ... https://t.co/fab8ZVRMVa
Follow EBR News on Twitter

Most Popular

  • 1
  • 2
Prev Next

The White-Box of Ethiopian Agriculture

The agricultural sector remains our Achilles heel, nonetheless, we remain convinced that agricultural-based development remains the only source of hope ...

Read more

For Whoever Has, to Him Shall be Given …

As the Ethiopian government seeks to transform the economy into one that’s rooted in manufacturing, the simplicity for local investors to access finance...

Read more


  • 1
  • 2
  • 3
Prev Next

Shooting in the Dark: The Anomalies of Headhunting

The war for ‘heads’ – also known as talent – has been raging for many years and the manner headhunters ‘poach’ people is getting tougher ...

Read more

Understanding Chinese Investment in Ethiopia A Critical Evaluation of the World Bank’s “Chinese FDI in Ethiopia” Survey

The World Bank country office in Ethiopia, apparently in response to the request by the government of Ethiopia, has conducted a survey of...

Read more

Mitigating Growing Income Inequality: What Needs to Be Done

Rising income and wealth inequality in many countries around the world has been a long-term trend for three decades or more. But the atte...

Read more

View Point

  • 1
  • 2
  • 3
Prev Next

Delivering Life Insurance: The Untapped Market in Ethiopia

Modern insurance transaction in Ethiopia was started by an Egyptian Bank in 1905. According to Ethiopian Chamber of Commerce there were 19, 33 and 40 insuran...

Read more

Cut Throat: The Vicious Cycle of Price Based Competition in Ethiopian Insurance Industry

For most, it was imprecise how Ethiopian insurers would manage their prices devoid of actuaries. As most insurers know, premium has a more significant impact...

Read more

Headache When a Key Personnel leaves a Company in the Financial Sector

The financial sector in Ethiopia has undergone considerable changes in recent decades. The dramatic rise of new market players into the sector has vividly al...

Read more