By Deon Verster, Country Manager, PayJoy SA 

Thirty years ago, the first smartphone sold just 50,000 units worldwide. Today, there are over 7 billion devices in use globally, and in South Africa, the story has shifted from who can get one, to who's ready for a better one.

A great deal has changed over the past three decades. Today these mini computers are much more compact, lightweight, carry multiple app ecosystems and an extensive range of advanced technology features. 

Despite the smartphone’s unpopular start with customers over thirty years ago, now almost 90% of cellular phones are smartphones. Projections are that smartphone usage will only continue to grow beyond the current 8 billion devices worldwide.

In South Africa, however, the smartphone landscape looks vastly different. According to GSMA research, mobile penetration in our country is more than 95% but only 18,65 million of South Africans have a smartphone.

Of course connectivity alone is no longer the full story. Smartphones are now essential tools for income generation, financial services, content creation and job seeking. What matters is not simply whether someone has a device — it’s what that device enables them to do. For approximately 80% of the South African population, device quality is now as much a barrier to inclusion as device access.

From access to upgrade – a market coming of age 

Smartphone access is estimated to change significantly over the next three years, rising to 25,8 million South African smartphone users by 2029 (Source: Statista). That is because the story is steadily shifting from users gaining first-time access to users upgrading their smartphones. This is largely due to the recent boom in alternative financing options such as buy-now-pay-later, mobile phone trade-ins, pre-owned devices, and flexible ownership models.

With only traditional acquisition models available in the past, many South Africans simply could not own a smartphone, much less upgrade to a better device. For those customers that could afford the upgrade process, the long-term and complicated contracts were often a financial blockade. Credit options for smartphones were also often limiting or involved incurring too much debt. For years, the smartphone market in South Africa was defined by what people couldn’t do: couldn’t afford the upfront cost, couldn’t qualify for a contract, couldn’t justify the financial risk. Alternative financing and flexible ownership models changed that equation. And now it’s changing it again, not by getting more people onto the first rung of the ladder, but by helping them climb higher.

Unlocking new opportunities with upgrades

The flexible ownership model has been the critical enabler here. By removing the barriers caused by credit checks, large deposits and long-term contracts, they created a pathway not just to smartphone access, but to smartphone progression. A customer who started with an entry-level device two years ago can now access something significantly more capable, on terms that still work for their budget. That is a meaningfully different story from simply getting connected for the first time. 

PayJoy, one of South Africa’s leading flexible ownership suppliers’, recent data tells this story clearly: just 10% of its customer base are entering the smartphone market for the first time. This figure is split between those upgrading from non-smart phones (6%) and those who have never owned a phone at all (4%). The remaining 90% - upgrading. The market is moving.  

The next phase of digital inclusion in South Africa will not be defined by connection rates only. It will be defined by what people can do once connected, and whether the devices in their hands are capable enough to make that possible. The question for South Africa’s tech and financial sectors is not only how to get a smartphone into someone’s hands for the first time. It’s also how to keep pace with a consumer who already knows exactly what they want – and is ready to upgrade and stay connected to the economy.