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June 2012



Is the iPhone the device for Africa?

Written by , Posted in Business and Tech

Frankly having an iPhone in Africa, is like driving a Lamborghini in grid-lock. The market is heavily dominated by basic, inexpensive phones, with about 95% of phone sales being basic dumbphones. Smartphone penetration sits at a lowly 6-8% and iPhones make up a very tiny piece of that pie.  Yet, despite low penetration rates, analysts are ambitiously heralding the start of the smartphone revolution in Africa, with claims that in 5 years most Africans will have smartphones.

While I’m excited about their predictions, the cynic in me fails to believe them. I also don’t believe that we’ll experience a repeat of the rapid adoption that we saw with basic phones. Simply put, basic phones are a good fit for the needs of the emerging market, smartphones are not. Not yet.

It’s clear that Apple focused on the premium market where the iPhone was concerned. The handset is tailored for the first world, where things like unlimited bandwidth, robust infrastructure, high average incomes and the concept of one person, one phone are taken for granted. Yet in Africa we have a different ballgame.

In Africa we have bandwidth constraints, lower average incomes, poor infrastructure, underdeveloped distribution channels and one family, one phone. Additionally the iPhone is heavy on data, costly on the pocket and the content in the App store is almost laughable when compared with its US counterpart.

It is tailored for a market where sharing content, advanced turn-by turn navigation and enhancing convenience for the end-user are key concerns. Africa is a market where a farmer needs to monitor his cows, a fisherman needs to communicate with his buyers and where streets don’t have names or numbers, let alone buildings to render in 3D. Enhancements such as Siri and 3D mapping are too mature for this market.

To go from a point of nonexistence to being a significant player in Africa, Apple needs to either release a dumb-smartphone, or regress back to the iPhone 3 and repackage it for the local market. It is not in Apple’s nature to regress, but with the arrival of the iPhone 4S, an iPhone 3 is essentially a dumbed-down smartphone. It is also more durable and relies neither on 4G nor LTE. However, there are fresh rumours that a cheaper iPhone 4 is being developed to challenge Nokia for market share amongst the lower-end consumers in China.

Apple needs to consider a strategic move into an emerging market, if they want to have any hope of maintaining their unprecedented year-on-year growth. A saturated, first-world, smartphone market means they need to look to the African, Chinese and Indian billions for growth.

It’s tragic how smartphone manufacturers have, as a whole overlooked the African continent, until recently. The inexpensive, basic cell phone has drastically altered the face of African economies. Mobile adoption is on the rise, mobile internet penetration is screaming upwards, mobile advancements are staggering and services such as uShahidi and M-Pesa have affected businesses, GDP’s and living standards. A 2006 study of emerging markets suggests that a 10 percent increase in mobile penetration correlates with a 0.6 percentage point increase in economic growth rates.

Imagine what kind of innovation we could realise with an Apple smartphone tailored to the African market, with apps that solve problems specific to the African user? The scope is incredible, with room for improvements in education, business, health services and agriculture.

The iPhone is not yet the device for Africa, as there are simply too many barriers facing their current handset. Yet it could be the device poised to bring about the most change on the continent, and Apple has the potential to change everything. Again.

As Hersman states, the company who builds a 1st world smartphone, for a 3rd world network, gets the next billion users.

Until then, in Africa, iPhone is the 1%.


images sourced here, here and here.