Smartphone makers ignore low-end users

BARCELONA
Consumers expecting low-priced smartphones at this year’s Mobile World Congress are in for a major disappointment.

All major firms — Samsung, HTC, Huawei, Sony and ZTE, are focusing on high-end handsets at the event that closes today in Barcelona.

“There is no money in low-cost phones because they cost more than $20 to produce,” said Mr Steven Ambrose, chief executive officer, Strategy Worx Consulting.

Samsung’s next in its flagship Galaxy range, the S6 and S6 Edge, are attracting a lot of attention globally and are expected to be available in Kenya from April 10.

Though East Africa Vice-President Robert Ngeru did not reveal the exact price range, the Note 4 launched at Sh75,000 in Kenya and the S5 currently retails at about Sh50,000.

HTC also impressed analysts with its M9 smartphone as Sony’s Xperia M4 and LG’s G Flex 2 all vie for the discerning consumer’s attention.
Even traditional Chinese manufacturers who target the sub $100 market are in the high-end zone this year.

The world’s third largest mobile manufacturer, Huawei, did announce the Y360 and Y365, which it considers entry-level but focused more on its MediaPad X2 tablet and Huawei watch which will compete with Apple’s.

Another Chinese original equipment manufacturer, ZTE, is also trying to make its mark at the world’s largest mobile gathering with announcements of a new range of devices.

BROADBAND COVERAGE

“Seventy per cent of the world’s population will have mobile broadband coverage in 2015,” Ericsson Chief Executive Hans Vestberg said in a keynote address.

The Swedish company, which no longer manufactures mobile phones, expects voice to be the smallest service in networks going forward.

“Mobility, broadband and cloud will transform industries,” Mr Vestberg said, perhaps indicating why phone manufacturers were ditching low-end devices.

Comparatively, Nokia — now Microsoft Devices — used the MWC stage last year to launch new Lumia devices aimed at emerging markets.

The World Bank estimates that 93 per cent of Kenyans are mobile phone users, but low-end phones, or feature phones still outsell smartphones in Kenya.
“The average revenue per user in Africa is $100, that’s voice and SMS,” said Mr Ambrose.

“If operators can drive their subscribers away from feature phones to smartphones, they can double that, so that’s why there isn’t much of a focus on that at an event like this.”

Many of the big manufacturers appear to be betting on wearable devices and payment services, as announcements from Visa and Airtel, Samsung, as well as HTC, show.