Until recently smartphones were not common in emerging markets other than among international business travellers and wealthy urban elites. Things are now changing fast.
More users are trading up to data enabled smartphones and experts believe emerging markets are now on the brink of a Smartphone revolution. For many of these new users a smartphone provides their first experience of the internet.
A lunchtime panel, hosted by voice SMS specialist Kirusa, at the recent Mobile World Congress (MWC) brought together a range of experts - and one very important end user - to look at issues driving the growth of smartphones in emerging markets and to consider the impact this will have on developers, service providers and OEMs.
With smartphones currently comprising about 10% of the total device market in India and Africa the growth potential is huge. The main factor currently restricting growth is affordability, not just of devices but also of the voice and data packages which users need to make use of them.
Several important developments at MWC pushed the already accelerating trend toward more affordable devices further. One of the most significant of these was emerging market device leader Nokia’s shock announcement of a range devices using the Android operating system. The move explicitly targets emerging markets, aiming to plug the gap between the company’s current Asha range of feature phones and the more expensive Windows Phone devices it will continue to market in developed countries.
Nokia faces many challenges but this development can be seen as a clear statement of its intention not to be left behind as emerging markets transition from voice to data enabled smartphones. Other big name vendors marketing smartphones with features specifically designed for emerging markets include both Huawei and Samsung.
New low cost entrant Firefox aims to take a slice of this market too, but arguably the biggest competitor for all smartphone vendors in Africa now is Southern China based Tecno. In under 5 years Tecno has quietly carved out a position among the top 3 vendors in Africa with a range attractively styled Android devices. In addition to low prices, Tecno meets African needs with features such as dual SIM and as a result now enjoys partnerships with many leading service providers including Safaricom, MTN, Etisalat and Aritel.
A point which emerged during the panel discussion is the growing problem of greymarket devices. Service provider panellists suggested that in some countries these account for as much as 25% of all devices. Greymarket devices give problems in provisioning and managing services as devices often transmit fake IMEI codes. The resulting poor quality user experience is more likely to be blamed on service providers rather than on the devices themselves.
According to panellists, the solution is for regulators to outlaw greymarket devices. This has happened in some countries, for example Uganda. But in neighbouring countries the problem is rife. Without regulation to prevent the greymarket, individual service providers risk losing market share to less scrupulous competitors.
Device cost is not the only issue to affect the rate of smartphone adoption in emerging markets. Low levels of literacy in English and the absence of local language keyboards, particularly in a country like India with over 20 official languages, also inhibits growth. This favours voice based services, as shown by Ghanaian superstar Yvonne Nelson, the panel’s VIP, who uses sponsor Kirusa’s Voice SMS service to send sound clips to her millions of followers on social media channels.
Other cultural problems affecting the adoption of smartphones were highlighted by Charles Matondane of Vodacom Tanzania who cited instances he has experienced in some more remote communities where older men feel the internet’s access to information threatens their social status as the most knowledgeable and respected community leaders.
On the flip side, panellists were in agreement that people in emerging markets are quick to recognise the benefits of the internet and that the most important services which will drive growth will be m-commerce along with mobile entertainment services.
On the potential for social networks such as Facebook, which have proved so popular in developed countries, to stimulate smartphone adoption in emerging markets, the view was less positive. Panellists pointed out that social groups in Africa, India and other emerging markets have a much higher degree of homogeneity. As a result the need to keep in contact and re-establish lost connections is much less.
The panel finally turned to the question of the high cost of data, which is without question one of the greatest bottlenecks affecting the growth of smartphones in emerging markets. There was agreement between the panellists and attendees that ‘all you can eat’ monthly data packages are quite simply unaffordable for vast numbers of users in emerging markets.
The solution is for service providers to break down their data offerings into granular, service specific, pay as you go packages. Fortunately there are signs that this is now starting to happen with operators able to switch on single data service or group of services on a PAYG basis, while not offering unlimited internet access.
It is innovative solutions like this that will ultimately lead to the mass market adoption of smartphones in emerging markets.
Driving Smartphone Adoption in Emerging Markets Lunchtime Panel
The Driving Smartphone Adoption in Emerging Markets lunchtime panel was attended by over 80 senior representatives from service providers, vendors, integrators and analysts. It featured Yvonne Nelson, African movie actress and model, along with:
Sharad Arora, Chief Wireless Officer, Tata
Arvind Bali, CEO, Videocon
Alec Barton, Founder and CEO of Developing Telecoms
Saleem Mobhani, Special Advisor, Mobile Entertainment Forum
Charles Matondane, Head of VAS and Internet Services at Vodacom Tanzania
Dr. Mehmet Unsoy, Managing Partner, mSolve Partners
