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Will Nokia comeback shake up regional market?

Tuesday August 29 2017
phone

Over the past two years, the average cost of a smartphone in East Africa has declined from about $200 to below $100 making the devices more affordable. FOTOSEARCH

By NJIRAINI MUCHIRA

East Africa’s smartphone market is headed for further competition with the return of Nokia devices.

The region has an average mobile penetration of 45.2 per cent and is considered a growth frontier for smartphones, particularly among millennials.

The Finish brand, which has made a comeback based on a licence held by HMD Global, wants to compete in this segment after launching three devices together with the iconic Nokia 3310.

“Smartphone penetration is still growing and that is a big opportunity for us. The Nokia brand awareness is more than 98 per cent, something that puts us at a good place to connect with consumers,” Joseph Umunakwe, HMD Global general manager in charge of West, East and Central Africa told The EastAfrican.

At the peak of its dominance between 2005 and 2010, Nokia devices commanded about 60 per cent of the Kenyan market in the features segment, before fading away when Microsoft shut down the device manufacturing unit in 2014.

Nokia had failed to read the changing trends — the smartphone revolution — causing it to loose its footing.

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Mr Umunakwe said that the fact that mobile operators are aggressively rolling out the 4G network that enables high-speed mobile Internet makes the company optimistic of making inroads in a market that is largely in a state of equilibrium in terms of devices dominance.

READ: Wearable devices now in East Africa: But where are the takers?

4G devices

According to global technology research and consulting firm International Data Corporation (IDC), although 3G handsets currently account for more than half of all new smartphone shipments across the continent, the uptake of 4G devices has been phenomenal, growing by 50 per cent last year.

By the end of next year, 4G handsets are projected to account for more than half of new smartphone shipments in Africa as prices for entry-level phones drop and the number of networks grows.

However, Africa’s smartphone revolution is showing signs of a slowdown, with the continent’s market totalling 95.37 million units in 2016. While this represented a 3.4 per cent year on year growth, it was a significant deceleration from the double-digit growth rates seen in the previous two years.

“Many African economies struggled throughout 2016 and this had an inevitable knock-on effect on the smartphone market which had experienced a very strong 2015,” said IDC programme director for mobile devices Simon Baker.

According to analysts, this means Nokia is walking into a tough terrain.

READ: iPhone turns 10, rocky start forgotten

Kenya is the third African market the company has launched its devices after South Africa and Nigeria. The firm plans to launch in Uganda and Tanzania in the coming months.

Samsung, which wrestled the mobile devices market in Kenya from Nokia, continues to dominate on the continent with 28 million units sold in 2016, although it was largely a flat growth from 2015.

Other brands making a wave in the East African market include Apple, Huawei, Infinix, Tecno, Wiko and Lenovo.

Nokia hopes to compete not only on the basis of pricing but also on the experience its devices offer consumers.

“We believe our devices will be successful in this market because we are bringing premium at every budget price range,” said Mr Umunakwe.

Over the past two years, the average cost of a smartphone in East Africa has declined from about $200 to below $100 making the devices affordable to the majority of people particularly the millennials acquiring their first mobile phone.

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