Are new cheaper smartphones really all that smart?
The influx of cheap smartphones into the South African market means cellphone users no longer have to buy the latest and greatest models – ranging up to R18 000 – but can still have a camera, access to the web, Facebook, WhatsApp and other internet-savvy features for as little as R550.
Siyabonga Blessing Ntuli has both an iPhone 6, which can cost up to R17 000, and a Mobicel device he bought for R699 from Pep.
“It’s like comparing the new Hilux to a 1995 Mahindra,” he said in response to a Mail & Guardian question online. “[The Mobicel] has got all the features but I hate using it.”
Vusumuzi Mgapheli Mashigo finds Alcatel smartphones to be a good lower-cost option. “They are superfast, have all the necessary applications, the camera is good depending on the model and they receive network well.”
Yanga Baker Nyanga bought a Huawei for R550 but says the camera is not great.
Cheap smartphones are driving a revolution in the market, according to Arthur Goldstuck, the managing director of World Wide Worx. “In two years, they have already caused the biggest migration we have seen from one technology [basic phones] to another [smartphones].”
According to World Wide Worx research, the number of smartphone devices in South Africa has grown from 19-million at the end of 2014 to 23.5-million at the end of last year. It’s estimated there are almost 42-million cellphone users in the country, with a population of 54-million.
Data from the global firm Strategy Analytics shows smartphone penetration has grown rapidly in recent years. As a percentage of total handset sales volumes in 2011, smartphones accounted for 22.3%. This grew to 57.7% of sales in 2014 and reached 72.8% in 2015.
Strategy Analytics data showed the manufacturer market share in South Africa in 2015 was dominated by Samsung at 55.3%. Apple was the runner-up but at only 7.4% of the market share, only just beating Huawei’s 7.3%. Nokia (Microsoft) held 4.1% and Lenovo-Motorola had 2.4%. The remaining 23.5% of the market is occupied by other brands.
The cheaper smartphone that made the biggest contribution was the Huawei Y220, which introduced a sub-R500 smartphone to the market, a subsidised price, but it was followed by a range of phones in the lowest smartphone price band of between R500 and R700, said Goldstuck.
“The main phones in this band now are the Alcatel Pixi and the Vodafone Smart Kicka, which came in at R549, and are offered through major retailers and major networks. MTN and Vodacom have been big drivers of these,” he said.
In general, a smartphone in this price band is a smaller phone, with 8.9cm screen (although it’s been moving up to 11.4cm), with less power and so is not as responsive and the screen and camera resolution is lower. Also, you don’t typically get 4G LTE on these devices, Goldstuck said.
Answering the M&G Online question, Tau Ya Mariri Mogshoa said that a year ago he bought an unknown brand (with only HD written on the battery cover) for R699 to use as a spare phone.
“Battery life is okay if you don’t spend too much time using the phone but it can be drained at lightning speed if used heavily,” Mogshoa said. Processing power is slower, the screen is easily scratched and the camera’s picture quality is not great. “Overall I would say the phone is okay for what I paid but it needs some big improvements.”
Apps such as WhatsApp and Facebook are also driving the demand for smartphones. Feature-phone (camera, internet but no apps) uptake has been diminishing rapidly. Although still available for less than R400, with functions that include accessing the internet and storing and playing music, a feature phone does not allow apps to be downloaded. For an extra R150 or R200, consumers are buying
smartphones instead and have access to applications that reduce the cost of communication. Basic nonsmart phones can be bought from retailers such as Pep for as little as R129.
In John Diederik Laurie’s answer to the M&G survey he said he had a bottom-of-the-range Android, which he bought for R550 but, subsequent to it being stolen, he said he preferred his Nokia 222 feature phone. Although not a smartphone, Laurie said the speaker and receiver, as well as the camera, earphones and other features, were better.
“A lower-priced smartphone, if from a major brand, one can expect it to fairly reliable,” Goldstuck said.
Those paying a bit more, though not nearly as much as the high-end prices, have good feedback. Zinhle Msomu is happy with the Samsung J1 Ace, bought for R1?499. And Celeste Kong, who paid R2 000 for a HiSense smartphone, claims it is equivalent to a Samsung S4. “Works like a charm!” she said.
Notable brands competing for smartphone market share in South Africa include the likes of AG Mobile, Xiaomi (the fifth-largest smartphone vendor in the world) and ZTE, Goldstuck said.
Next to enter the fray is the Nigerian mobile brand mi-Fone, which, over the past eight years, has made inroads in its own highly competitive mobile market.
According to a 2015 study by the International Data Corporation, Nigeria accounted for 14% of all smartphone shipments throughout the continent during the first quarter of 2015 and South Africa was responsible for 12%.
Available on takealot.com as of May 15, the mi-Fone smartphone offerings will begin at R949 and range up to R2 099. Also on takealot.com, Huawei smartphones range from R1?000 up to R12 500. Nokia’s most expensive offering on the website was R2 000 for the Lumia, with the cheapest being about R800. Samsung’s offerings start from more than R800 ranging up to more than R17 000. Apple’s older models can be bought for slightly less than R3 000 and its latest models can cost more than R18 000.
Alpesh Patel, mi-Fone’s chief executive, said the mi-Fone is well priced against large “tier A” brands because the company has lower overheads and because it caters for average African consumers, which it believes are very conscious about how they spend their disposable income.
“An Apple iPhone or Samsung Galaxy Edge is what we call ‘aspiration beyond reach’,” said Patel. “Everyone wants one, but their pockets won’t allow them to get one.
“A similar or slightly less-featured mi-Fone, which gives access to most functions and is what we call ‘aspiration within reach’, you can actually have it.”
Founded in 2008, mi-Fone was the first African mobile-devices brand, born out of a realisation that big brands were “missing the point, and that ultimately Africa was best served by Africans themselves”.
The mi-Fone handsets are designed in Africa, catering for the African market, and the final products are assembled in China — “the same as Apple”, Patel said.
The only handset on the South African market that is manufactured domestically is Mint Mobile, whose devices are making inroads into the market and are available from Game stores, starting at R999.
Mint Mobile is a division of CZ Electronics Manufacturing, which was established in 2002 after the purchase of the production assets of the Alcatel factory. The company employs 250 people and occupies factory space in Boksburg. It offers affordable smartphones, which have, it claims, “in some instances even better features and performance than other leading imported tier-one devices”.
It achieves this through its relationships with high-end chip set suppliers such as Intel, MTK and Qualcomm and partnerships with highly sophisticated design houses abroad, it says.