Africans Should be Developing for Smartphones, Not USSD or Feature Phones

Published on: Jun 13 2012 by Wayan Vota

Recently, TechCrunch made the bold prediction that in five years’ time, most sub-Saharan Africans will have smartphones. At first I thought this just more mobile phone hyperbole. That feature phones will be with us for a long time – “dumb” phones are still 40% of new handset sales in the USA.

kenya-smartphone.jpg

But then I started to think about numbers. Whenever you multiply something by 1 Billion Africans, you can find a market in a niche others don’t notice. Just listen to what Kachwanya says:

“People talk of developing for the right market using the right technology based on the right access point , which in the case of Kenya would mean the use of USSD and feature phones (dumb phones). That is very encouraging talk, but then after that the developers have to go and look for the foreign investors who think SMS is a 19th century technology.

On the surface it might look like it is not the right time [to develop smartphone apps] but I believe the time is now. The first question people would be asking is, how many people have Smartphones in Kenya. My guess is over 500,000…

Now let say you develop a system that only 10,000 Kenyans use regularly. If you can convince each of the 10k people to pay you Ksh.1 daily, then you will be earning 10k daily…mmmh tell me any of the apps in the Kenyan market today earning that amount? Very few.”

And he has a very good point. Smartphone owners have cash flow and by the mere act of owning a smartphone, they show that they value and will spend on quality ICT. So while we can debate the full smartphone penetration in 5 years time, it’s obvious that there is no debate on the opportunity in reaching whatever percentage of Africans have smartphones today.


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Wayan Vota is a Senior Mobile Advisor at FHI 360 and is a regular contributor to ICTworks. He co-founded ICTworks, ICT4Djobs, ICT4Drinks, Technology Salon, Educational Technology Debate, OLPC News, Kurante, and a few other things.
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14 Comments to “Africans Should be Developing for Smartphones, Not USSD or Feature Phones”

  1. Rob says:

    Of course, Africans should be focused on how they can develop apps,systems etc.. that can actually earn money but saying they should ignore the 95% is somewhat strange statement. Maybe “Africans Should be Developing for Smartphones as well as USSD and Feature Phones is slightly more sensible.” – and guess what – they are anyway.

    Realistically Africans should be developing 3rd party applications for Mxit – large and growing feature phone user base, built in billing and payments, reasonably easy to develop apps for and going for a big marketing expansion into Africa. Africans should also be developing mobile apps for Facebook.

  2. Ime says:

    What’s your definition of a smart phone? And does the definition/perception of a smart phone change with time?

  3. Anonymous says:

    This is awsome total truth… Told this to a panel while defending my project proposal but was completely shut down and was told to develop USSD and SMS apps for “dummy” phones yet my target market is a smart phone generation….

  4. Wayan Vota says:

    I often see whole debates around what is a “smartphone” and I think they are a waste of time. Can the user add software to the device right? Can those added software applications access the data network? Can it present a web page in something like a native browser experience? Then its a smartphone. And more importantly, it doesn’t even need to make a “voice” phone call to be a robust mobile platform worthy of developer’s attentions.

  5. Wayan Vota says:

    Let us say there are 100 people you could develop software for. 95 of them have phone A, 5 of them have phone B. The 95 with phone A have and average of $1 per person of discretionary purchasing power. The 5 with phone B have $10 to spend each. Phone A people buy less than $.10 in phone-related services. The phone B people buy $5 in phone-related services. Which market would you want to sell to?

    This is the market that mobile phone application developers are facing. So yeah, 95% are dumb phones. I say ignore them. Focus on who has money and willingness to spend it on mobile apps.

  6. Tim Denny says:

    I am contemplating your definition of a smartphone. I own a phone I had never considered to be a smartphone – Samsung S5320. So far it has been a wonderful and basic candybar style touch phone. Lacks wifi, and 3g but gets the job done perfectly fine for my needs. I did not consider it a smartphone as it cannot run robust applications, yet I can occasional install some Java based apps. I say occasionally as it is a rare find to come across an app that works correctly on the phone, then again I do not spend much time on such issues as I am fine with what is on the phone as is. I did have to hack it last year after purchasing it used as someone slipped in the wrong firmware and thus some of the features were not working (bluetooth mainly).

    So what do I consider a smartphone… something smarter than my phone… one running one of the smarter OSes like Windows Mobile, iOS, Android, Blackberry, WebOS, etc… My phone I would consider simply a feature phone with the capability of installing some Java apps. Then again my old phone a Nokia 3110 running Symbian n30 could handle some simple Java apps too but that surely was farther from smartphone.

    Anyhow… really what is a smartphone… does being able to install an app make it smart?

    Cheers
    Tim

  7. Rob says:

    Why don’t you factor in Development Costs, Marketing Costs, Market analysis of the particular product, External competition, MNO factors etc…

    It may be interesting once you have got all your econometrics fine tuned

  8. Wayan, you’re absolutely right… if you’re talking about making money. In that case, build for those who can/will pay. But if you’re talking about ICT4D, trying to reach the underserved, then targeting smartphones is a recipe for failure. It all depends on what you’re trying to do: context matters.

  9. Merryl Ford says:

    Since the advent of affordable Android phones, I’ve felt it’s only a matter of time before there is a huge swing towards smartphones in Africa. We’ve seen something similar with Blackberry here in South Africa, where our youth (rich and poor) have moved to these phones en masse. The main driver has been the (perceived?) fixed data cost for these devices – access to the internet at a fixed affordable amount. So at one stage I thought it would take as little as 2 years for affordable Android phones to take over the market here in South Africa.

    However, I don’t think it’s that simple. There are 2 major factors that will have a huge impact:

    1) Battery technology – basic and feature phones are much less power-hungry – lasting on a single charge for a few days at a time. Access to power to charge phones is a problem, particularly in rural areas in Africa. The typical smartphone is very power-hungry. It will be interesting to see what the choice will be – feature phone that lasts a few days vs smartphone that lasts a few hours. Hopefully this will act as an incentive to African entrepreneurs to come up with new and better charging solutions, or re-imagined smartphones (perhaps with e-ink screens?)

    2) Business models – particularly with regard to data charges (Blackberry serves as a fantastic model here in South Africa). The device may be relatively cheap, but the call, data, etc. charges make the whole package pretty expensive. Marketing of cheaper smartphones hasn’t been great here in South Africa, which is a HUGE shame – e.g. Some of the cheaper Androids are only available via contract, when the target market prefers prepaid. I just hope that the network operators wake up and start really marketing and pricing these devices to make them attractive to all.

    It will be interesting to see what will happen in the months to come, also with regard to the impact of affordable tablets now flowing into Africa.

  10. Wayan Vota says:

    Thanks for catching the subtle distinction in markets. If we’re talking about African mobile apps developers who want to sell to the retail market, they should be making smartphone apps. However, if they are looking to sell to the NGO market to reach the underserved, then USSD and SMS (especially SMS) for feature phones is a whole other viable market.

    Just don’t confuse the two, their aims, technology, or buying processes

  11. Dave Lehr says:

    I agree that the debate is over around Smartphones and eventual penetration, though I would argue that current Smartphone owners do show some behavior that is similar to an American 22yr old buying a BMW; does s/he have cashflow or a status need? Not sure…..

    What is true is that the development of commercially successful apps/solutions depends on a need (real or perceived) and the particular platform whether USSD, SMS, or Smartphone is the platform, is way less important. Copying ideas from more sophisticated markets always a good idea, but I am not sure that there is a market for my favorite app (tells when the buses are coming in San Francisco, saving me about 10 minutes a day).

    In the near-term, financial successes are critical as they will encourage some of the best and brightest to follow on and compete. If nobody makes money, only the very few bold, brave, and crazy will jump in. I strongly caution against relying on guesstimates of a market size and then assuming you can get a percentage of that market. How many of you remember the internet businesses in the US that were selling $1.00 per pound dogfood online for only $0.95. Well, none of them are around today.

  12. The feature phone in Africa will not disappear in 5 years. Sure there is a desire for many to have a Smartphone. Sure the cost will come down. But will this be a true “smart phone”. It will certainly have a touch screen, it may even have a half decent battery life but the specifications, the quality and reliability will not match that of a feature phone.

    The biggest challenge is not the device but the network to support these devices. Investment in the infrastructure is essential and of course very expensive. Organizations like Huawei and Ericsson are likely winners here. Do the operators have the willingness and the capital to invest? 2.5G is the only option in most places. There is congestion on the networks in the “developed” markets what is this likely to be in Africa.

    Android, USSD and SMS are not the only options. Use of a cloud based platforms that support multiple OS provide developers the options to hedge their bets.

  13. Warero says:

    Africans don’t pay for apps. We crack them. Even the wealthiest of app users won’t pay for an app when he or she can get it for free.

    This is why it has been reported that 83% of software in East and Southern Africa is pirated. This includes corporate accounts with spending power.

    While developers speculate on the viability of monetizing apps, VAS Content Providers and Mobile Networks and their partners are earning thousands of dollars from USSD and SMS based content services such as ring tones, marketing promos,raffles, edutainment and NGO initiatives.

    This is where the money is.

    Forget the iPad/iPhone and Android apps.

    Even in the projected 5-10 years, user retention is low, competition is too stiff from international apps who are better capitalized,more established, who’s end game on tech projects are built around sound business, very different from the tunnel vision that most dev projects seem to be, purely tech without considering the whole concept as a business with an exit strategy.

    But the simplest reason is that people won’t buy it when they can get similar value for free.

  14. Ade Atobatele says:

    Africans should be developing HTML5 mobile-first applications, that are accessible outside restrictive appstores, don’t need to be downloaded, and can make the transition from feature phone to smartphones, tablets, desktops, and internet enabled televisions.

    Btw we eat our own dogfood on NigeriaDotCom (http://www.nigeria.com)

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