Telecoms: Smart money is on Smart phones in Africa
The age of the $100 smartphone is in full swing. Now, low-priced handsets are challenging those of the top global brands for the biggest share of Africa's booming telecoms markets. In September, Huawei, one of China's leading telecoms manufacturers, threw $1m into an aggressive marketing campaign to launch its IDEOS smartphone, priced at less than $100, in Nigeria. It will have an uphill battle to win the favour of a Nigerian middle class obsessed with the latest and most expensive BlackBerrys, Samsungs and iPhones. Nigerians do not want to be second best. Liza de Wet, marketing director for East and Southern Africa at Huawei, says the company needs to build up its 'brand equity' on the continent and that it will start spending more on direct marketing to target consumers in Africa. ?
When Huawei launched the IDEOS smartphone in Kenya last September, executives thought the company would be lucky to sell the 60,000 devices ordered by Safaricom. But those flew quickly off the shelves, and Safaricom put in a top-up order for 150,000 more. For a smartphone, the handset is cheap, retailing at KSh8,490 ($84) with 500MB of data and 1,000 minutes included in the price. Adverts on 30 billboards across Kenya simply showed the phone, the price and the Facebook icon. ?
Nigeria has just been on fire in terms of the BlackBerry growth
Though smartphones currently make up only 10% of the handset market in Africa, telecoms analysts Canalys expects that to double by 2014. While top-tier smartphone manufacturers debate whether and when to launch low-cost models, the rest of the world's handset manufacturers are turning their attention like never before to the young middle classes that have until now been unable to afford mobile internet.?
When US tech giant Apple failed to launch an iPhone 5 at its much-hyped press event in early October, opting instead for an upgrade to the iPhone 4S, it also held off from releasing a 'nano' version of its iPhone. It is rumoured to be smaller, cheaper and aimed at consumers in emerging markets. Apple, it appears, is not quite worried enough about competition from smartphones carrying Google's Android operating system for it to go full throttle to the lower end of the market. But it has dropped the price of its older iPhone models – the iPhone 4 will be available for $99 in the US and its predecessor will be free with a mobile phone contract. Apart from South Africa, Apple has not yet paid real attention to Africa, where its products are instead available as luxury imports.
??Bumper pickings for Blackberry
For Canada's Research in Motion (RIM), the makers of BlackBerry, Africa offers an increasingly bright spot on an other-?wise gloomy horizon. While RIM announced it was cutting 10% of its global workforce as sales dipped in Europe and North America, it overtook Nokia for the first time in terms of the share of devices shipped to Africa in the second quarter of the year. ?
RIM's boost was partly due to the phasing out by Nokia of its Symbian operating system, with operators waiting until new handsets – promised by the end of 2011 – come online using Microsoft's Windows Phone software.
?It seems the success of BlackBerry in Africa took RIM by surprise. With offices in South Africa and Egypt, it is now opening more in Kenya and Nigeria. In July, 2011, the BlackBerry Curve 8520 became the top selling smartphone in Nigeria, where BlackBerry Messenger (BBM) service has become a national pastime for young middle-class Nigerians. It has even spawned a Nollywood comedy called Blackberry Babes. "Nigeria has just been on fire in terms of the BlackBerry growth," says Patrick Spence, RIM's managing director of global sales and regional marketing. "It's our fastest-growing market, quarter over quarter, globally."