Smartphone manufacturing is one of
the most competitive consumer segments. In the last decade, innovation
has upped levels of functionality and complexity in mobile devices and, with
that, comes a hefty price.
A number of smartphone manufacturers
produce these devices for emerging markets, but do African-born companies have
what it takes to compete with leading brands in terms of market share and
available technology? And can this be done while also keeping costs
down?
Earlier this month Seemahale
Telecoms and CZ Electronics entered into an agreement to manufacture
smartphones and tablets in South Africa. As far as Seemahale CEO Thabo Lehlokoe
is aware this will be a first in Africa. “It’s not right that out of a billion
or more phones in Africa, none are made or assembled in Africa. Some are
designed here, but they’re then made in China,” he said.
The 100% black-owned company will
manufacture a 5-inch smartphone and a 10.1-inch tablet. While the printed
circuit boards used in the production of the locally-made smartphone will be
imported, everything else will be done locally, including the
assembly of components such as chips and wiring, housing production and the
printing of user manuals.
Africa is the second largest mobile
phone market in the world, and according to the International Data Corporation
(IDC), shipments of smartphones in Africa went up 21% in the second quarter of
2013, with smartphones now accounting for 18% of the overall mobile phone
market.
With so many consumers ready to
purchase smartphones or upgrade their current feature phones to newer models,
the question of whether or not Africa is ready to satisfy the
market is relevant. Put simply, why are there not more
locally-manufactured smartphones on the continent?
It could be down to a number of
factors, most importantly price and technology. Ensuring the latest
technology in a device is a costly business and many companies simply do not
have the capital to fund high-end devices.
The smartphone from Seemahale
Telecoms and CZ Electronics is expected to make use of a 960×540-pixel LCD
capacitive-touch screen, feature 4GB of storage, while running on a
dual-core 1,5GHz processor powered by a 2 250mAh battery –
hardly cutting-edge technology some may argue, but it does break down the
price barrier.
Nigeria’s Phone and Allied Product
Dealer Association (PAPDAN) also recently announced that they would soon be
launching two new phones, made exclusively in the Country, which was a result
of 20 Nigerian investors pooling resources together to develop mobile devices
that cater to the local population.
While the company has yet to
release specifications for their iQ and MaxTel devices, it is expected
that the specifications will be similar to Seemahale’s device – at a
cost of around $100.
However it is not only
individuals, innovators or entrepreneurs who want to bring cheaper smartphones
to the Africa market. International company Intel released the Yolo smartphone
with Kenya mobile operator Safaricom earlier this year and it has some rather
impressive specifications.
It makes use of an Intel Atom
processor Z2420 with Intel Hyper-Threading Technology, has the ability to
capture full HD video or capture up to seven pictures per second—in 5-megapixel
quality and has a built-in FM radio with a 3.5-inch touch screen display.
Chinese manufacturer Huawei launched
the Ideos X1 smartphone into the Kenyan market a number of years ago, one
of the first mainstream devices to break through the psychological price
barrier of $100.
Samsung, who currently has 52%
market share in Africa, launched the Galaxy Pocket in several markets and
consumers will be getting the familiar Samsung experience in a stripped-down
version of the popular Galaxy family of smartphones – and retails for around
$118.
Moving into a slightly higher cost
bracket, Microsoft partnered with Huawei in the beginning of the year to
produce the Huawei Windows Phone, as part of Microsoft’s 4Afrika initiative.
The Huawei 4Afrika Windows Phone will retail for approximately $150
and will initially be sold in seven countries.
With at least four international
manufacturers actively developing and releasing smartphone for Africa, is it
such a good idea for local companies to try to compete with the bigger players?
Large companies have an established distribution footprint, have the capital
and technology for Research and Development and have the ability to enter new
markets very quickly.
But there is one thing that brands
such as Samsung, Huawei and Microsoft have over independent smartphone
manufacturers which could seriously scupper their plans – that is customer
brand loyalty.
“Africans are generally quite
conscious of brand, quality and image. We are being very clear that we are not
going to be building something cheap for this market. What we want to do is
deliver real quality innovation at an affordable price. Compared to some
smartphones that cost $600 here, this is very affordable,” said Fernando de
Sousa, the general manager for Microsoft Africa.
Independent investor, innovators and
local manufacturers might have the best intentions when aiming to develop a
smartphone (or even a tablet) for the African continent, but as long as major
players are already investing heavily in Africa, they will have an
uphill battle to find traction in a very crowded and highly-competitive market.
“The African smartphone space is
wide open for whichever device manufacturer best executes its affordable
smartphone strategy. Only time will tell, but the battle is sure to be fierce
and likely profitable,” wrote The Next Web.
