Microsoft seeks to lead in Africa

Warc, 6 February 2013

LAGOS: Microsoft, the technology giant, is partnering with Huawei, the Chinese telecoms group, to launch low-cost smartphones in Africa, reflecting rising interest in the region among major companies.

The Huawei 4Afrika Windows Phone will be priced at $150, and go on sale in seven markets - including Angola, Egypt, Ivory Coast, Nigeria and South Africa - this month.

Gustavo Fuchs, director, Microsoft Windows Phone for the Middle East & Africa, told the BBC this effort should make "tens of millions of smart devices available across the region" in the next few years.

"We're looking at the biggest channel for each country," he told the BBC. "In South Africa, it's operator-led, in other markets like Nigeria and Angola there's a mixed environment and in the Ivory Coast they are only sold at retail."

The new handset is expected to be the first in a series of devices tailored for African consumers, and will be aimed at university students, developers and first-time entrants into the smartphone category.

"Affordability is important but without the right local content we believe a lot of users will not see the benefit in the change from a basic feature phone to a smartphone," said Fuchs.

The GSMA, the trade body, has stated that sub-Saharan Africa's mobile market logged a compound annual growth rate of 44% from 2000-12, with the mobile industry also contributing $32bn to this area's combined GDP.

In a further example of the continent's potential, mobile phones already account for 58.1% of web traffic in Zimbabwe and 57.9% in Africa, versus a global average of approximately 10%.

While smartphone penetration currently stands at less than 10%, uptake is set to rise by 40% a year from 2012 to 2017. The GSMA predicts these devices will hold a 50% market share in South Africa by this date, with Nigeria on 29% and Kenya on 28%.

"Africans are generally quite conscious of brand, quality and image," added Fernando de Sousa, general manager of the 4Afrika Initiative. "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."

Anshul Gupta, an analyst at research firm Gartner, said TCL, ZTE and Lenovo, three Chinese players, were targeting Africa's mobile market, and aiming to provide smartphones for under $50.

Data sourced from New York Times/BBC; additional content by Warc staff