Mobile phone sales bounce back in Brazil

The market has shown signs of recovery in the first quarter of the year, says IDC.
Written by Angelica Mari, Contributing Writer

Mobile phone sales in Brazil have shown signs of recovery over the first three months of 2017, according to number from analyst firm IDC.

Some 12,4 million mobile phones were sold between January and March, 25,4 percent more than the same period in 2016.

"The worst moment of the mobile phone market in Brazil seen in early 2016 was left behind. Over the last ten months, we have seen an increase in sales over nine months," says IDC Brazil analyst Leonardo Munin.

Smartphones represented the lion's share of all mobile phone sales in Q1, generating 13,3 billion reais ($4,08 million) up 22,6 percent on the first quarter in the prior year when the segment generated revenue of 10,9 billion reais ($ 3,34 million).

Feature phones generated 108,7 million reais ($ 33,3 million) in revenue, however this segment has seen a drop of 22 percent in revenue on the 139,4 million reais ($ 42,7 million) seen in Q1 2016.

The average mobile device ticket has gone down from 1179 reais ($362) in the first quarter of 2016 to 1142 reais ($350) in the first three months of 2017. However, sales of phones priced above 1300 reais ($399) has grown the most in the period, from 18,8 percent in Q1 2016 to 25,5 in the same period in 2017.

This was the first time that this price bracket has grown more than the mobile phones priced between 700-999 reais ($214-306), which still represent 49 percent of the total market, the analyst firm says.

According to IDC's Munin, the factors driving the recovery include a more stable dollar-real exchange rate, as well as the launch of more affordable products and government efforts to stimulate the economy such as allowing Brazilian workers to withdraw a total of 35 billion reais ($11.3 billion) from a severance fund.

For the entire year, the analyst's predictions are upbeat: 7,2 percent growth in sales is expected, with 47 million smartphones and 4,2 million feature phones sold.

"Manufacturers have competitive strategies and that stimulates sales," says Munin.

"Besides that, we have a base of 121 million smartphones in Brazil and the number of old devices is rather large. This could prompt users to upgrade and therefore boost sales too," the analyst points out.

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