android-africa
Mobile Communications

Android One: Will Africa plans impact a global strategy?

Android One, Google’s initiative to bring low cost smartphone and internet services to the developing world, has set its targets on Africa. The initiative has partnered with OEM Infinix to release the HOT 2 smartphone, costing around $90, which will be available in Nigeria to start, with Egypt, Ghana, Ivory Coast, Kenya, and Morocco to follow soon after.

Google has been eyeing up several markets for rolling out the Android One program. Last year it kicked off with launches in India and several other Asian countries. Now with Africa on the Android One map, it’s slowly but surely learning new lessons about each of the markets and the challenges they pose.

The initiative in India, for example, has been put on the backburner recently as it had “not delivered to expectation” according to Rajan Anandan, Google’s VP for India and South East Asia, but is scheduled for a relaunch soon. The process appears to be patchy thus far, not quite delivering on the lofty promise of affordable smartphones for all. Africa will prove a worthy test ground for Android if it plans to crack the next logical market on Android One’s game plan, South America.

The lessons to learn from Africa

Africa’s mobile revolution has been well-documented. How certain countries have adopted mobile payments is especially impressive when you consider that services like Apple Pay only launched last year, and is really the first example of a major tech company getting payments right, after disappointing efforts like Google Wallet.

First launched in 2007 in Kenya, M-Pesa has been a shining beacon of mobile technology in action in Africa. It allowed for mobile commerce to grow with older feature phones, conducting business through SMS.

Africa and South America may be very different markets but they hold some similarities too. Both are experiencing impressive growth in the use of mobile phones but these phones aren’t always smartphones. This has, in many ways, stifled the growth of the mobile internet somewhat but things may change soon.

For a long time, feature phones were the go-to phone but smartphone penetration is growing impressively. For example, in Nigeria, the first country on Android One’s Africa checklist, approximately 27% of the population has a smartphone (compared to 62% with a non-smartphone and 11% with no phone at all). These figures are common across the continent but an Internet Society study from June tips 23% of phones in Africa will be able to connect to the internet by 2016.

Africa’s mobile numbers may look encouraging from certain perspectives but when you drill down into smartphone numbers, things shrink a little. That’s exactly what a program like Android One wants to change.

While the Infinix HOT 2 at $90 certainly looks like a great deal, it is still a little more expensive than the smartphones released in Asia under the Android One banner. These kinds of costs and the attitudes of customers in different regions will have an effect on Google’s different strategies, says Eric Handa, CEO of telecom and fibre consultancy AP Telecom rather than a one size fits all kind of model.

“It is important to understand how people buy phones outside of Western Europe and the United States and Canada. When folks [in the west] buy, they buy on a post-paid program, they’re buying on a credit or debit card. That’s not the case in South America, that’s not the case in Africa,” he says. “People top up their phone and when you top up your phone, it’s difficult for a subsidy to make any sense because you don’t own the customer, they can switch in and out, there’s very little loyalty amongst programs.”

Android One’s first country, Nigeria, may now be Africa’s largest economy but its average income still stands at roughly $3,000. Spending a couple of hundred dollars on a smartphone is a lot of money.

“I don’t know what the economics look like for somebody who’s going to be buying [a smartphone] or through a monthly service agreement,” says Handa, so a cheap smartphone like the HOT 2 on a plan or to top up is the shot in the arm that African nations will need to increase smartphone penetration.

Android’s potential in South America

South America is another burgeoning smartphone market. However it throws up its own unique challenges and advantages in equal measure. Smartphone penetration is higher on average, at around 37%, with some countries much higher than others. About half of Colombia’s and Chile’s mobile users are on smartphones and a country like Brazil has a higher average income than say Nigeria.

Android One hasn’t launched in South America yet but could it be on the cards? Android is already a popular operating system in Latin America. Figures from 2014 showed that Android had a very strong 89.7% market share among smartphone operating systems in Brazil, the biggest market, while Argentina had 86.1%.

Latin America is a rapidly growing market and there’s a demand among consumers for affordable smartphones.

Xiaomi, the Chinese smartphone giant that recently entered Brazil, is a “game changer” for emerging markets, says Eric Handa. The company will be a formidable opponent for other Android devices in South America and indeed anywhere else in the world.

“[Xiaomi’s] smartphone technology is really at today’s market price for non-smartphones so they have the ability to move the needle tremendously,” says Handa. “I think their brand recognition and their ability to have a browser and some Play Store or app store is really a game changer. Not everyone is going to be able to afford a Samsung or an Apple.”

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Jonathan Keane

Jonathan Keane is a freelance journalist, living in Ireland, covering business and technology

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