Africa is battleground for low-priced smartphones

Major tech vendors jostle for position in booming market

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Africa has become a battleground for low-to-mid-range smartphones following high-profile launches of products from leading manufacturers in the last two months.

In Kenya last month, Safaricom, the region's largest mobile carrier, launched the Yolo smartphone, based on Intel's Smartphone Reference Design for the low-price segment of the smartphone market. The phone incorporates the Atom z2420 processor, includes support for 1080p HD video capture, and features a 3.5-inch touchscreen display.

Intel hopes to use Kenya, East Africa's largest telecom market and the third biggest in Africa after Nigeria and South Africa, as a launch pad for smartphones based on its reference designs.

Last week, Chinese telecom equipment company Huawei Technologies partnered with software maker Microsoft to launch the 4Africa smartphones. The Huawei 4Afrika phone is being touted as a full-function Windows Phone 8 smartphone, preloaded with select applications designed for Africa.

Nokia has also unveiled what it calls the "most affordable Windows Phone 8 smartphone," the Lumia 620, in African countries including South Africa and Egypt.

The smartphone market across Africa is growing rapidly, with consumers demanding richer features and services. However, the pricing of the phones has been a hindrance to many unemployed youths.

To reach the youth market, tech companies are expected to reduce prices on smartphones.

"Young people are the majority in Africa but many are not employed," said Amos Kalunga, telecom analyst at Computer Society of Zambia. "Therefore bringing in smartphones that are affordable is an idea that will see millions of these youths buying the phones regardless of their employment status."

He said Africa remains the only continent in the world that has a dynamic telecom market that cannot be avoided by any company wanting to drive revenue from smartphones and other telecom services.

The Nokia Lumia 620 is billed as "entry level smartphone" that will fill the gap after the Nokia Lumia 920 and 820, which are already available in many African markets including Uganda and Ghana. In South Africa, the Lumia 620 is available through regional operator MTN.

East Africa telecom analyst for Informa Telecom and Media Danson Njue said, "handset makers and tech firms are increasing becoming aware about devices that Africans can afford."

Nokia, Microsoft and Intel are all banking on the increased usage of social media in the region, with Facebook and Twitter seeing a growing number of users.

Mobile data and broadband technologies are increasingly being used by operators as a substitute for poor or non-existent fixed-line infrastructure in the region. Operators in the region have been forced to compete more aggressively on the provision of data services for revenue because of the flattening growth curve in voice communication in the region's more mature markets.

Nokia hopes to lure African developers into creating apps that can be used locally. Kenyan developers are gaining international recognition for developing a number of apps including mobile banking services that have revolutionized the approach to banking in the region.

Nokia, Microsoft and Intel are all trying to bring lower-priced smartphones to Africa because Africans are upgrading to data-enabled handsets from basic phones. But of the three companies, Microsoft seems to have an edge over the other two companies on the side of distribution.

Microsoft's partner, Huawei Technologies, already has a presence in many African countries where it has been working with governments to implement e-government projects. The Chinese company has also been active in the making and distribution of low-cost customized handsets to operators in the region and has further been laying fiber-optic networks in countries including Zambia, Zimbabwe, Uganda and Kenya.

Distribution of the 4Africa smartphones will therefore not be a big problem for Microsoft. Microsoft phones will for a start be available in seven African countries including South Africa, Morocco, Egypt, Ivory Coast, Angola, Kenya and Nigeria.

The 4Africa Initiative is part of Microsoft's plans to have tens of millions of smart devices in the hands of African youths by 2016. Microsoft also wants to bring 1 million African small and medium scale enterprises (SMEs) online, train 100,000 members of Africa's existing workforce in addition to helping 100,000 recent graduates develop skills to improve their employability.

Although Intel was the first to launch its Yolo smartphones, it has so far not expanded the distribution of the phones to other countries in the region apart from Kenya, where the phones were launched.

Like Microsoft, Nokia will also not likely have problems with distribution because of the company's partnership with MTN, which has operations in more than 18 countries in Africa.

Interestingly though, Microsoft is fighting on two fronts. Another part of the 4Africa initiative is a joint Nokia and Microsoft customer training program in Nigeria and Kenya to help accelerate the adoption of Nokia Lumia 510 and 620 phones.

Last week, meanwhile, South Africa largest operator, Vodacom, released figures showing that its active smartphone users have grown to more than 29% of its subscriber base at the end of the fourth quarter in 2012.

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