All is Not Well for New Players in the Kenyan Smartphone Market

Only the strong will survive

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The Kenyan mobile phone market is tough, competitive and unforgiving. Many, who entered it with a lot of pomp and glamour, are slowly realizing this after having sunk tens of millions of shillings with no tangible results.

When I interviewed the head of Infinix Mobility’s operations in Kenya late last month, you could assume, from his easy going and candid nature that he and his company had had it all easy. Far from it. Their success in the Kenyan market is the result of sending a message that resonates with their prospective clients – in this case, affordability – and good understanding of the Kenyan market thanks to the experience Infinix’s mother company Transsion has garnered in not just Kenya but the larger African market from its presence with the Tecno brand for nearly a decade.

Other mobile phone brands entering the Kenyan market haven’t been as lucky and as such, they’ve quickly fallen prey to the unforgiving nature of the market.

Obi is the latest to go out

Obi Worldphone, the former Obi Mobiles, as we already highlighted, has been forced to exit the Kenyan mobile phone market after sales of its devices spectacularly flopped. They failed to pick up despite the company’s attempts to entice both the online buyer who makes up for all those big growth figures that Jumia is reporting and the ordinary buyer walking into a store run by familiar faces in their towns far away from Nairobi.

Obi Worldphone is not alone. More are falling by the wayside as the train that is the Kenyan mobile phone market continues its journey through the digital divide valley.

Mi-Fone is next

We have it on good authority from our sources that Mi-Fone, the self-proclaimed quintessential African mobile phone brand, is in the process of exiting the Kenyan market, and, likely winding up all its African operations as well.

This is not the turn of events that Mi-Fone founder and CEO Alpesh Patel seemed upbeat about when we met him one evening in Nairobi late last year. According to him, then, Mi-Fone was going to get back into the market with a bang. The company was just fresh from a new cash injection from its unnamed investors that was to help it revive operations that had hitherto stalled in its over a dozen African markets as well as expand to others. At the Mobile World Congress in Barcelona, Spain, early this year, Mi-Fone announced a partnership with Finnish company Jolla that would see its Sailfish operating system power some of the Mi-Fone smartphones expected in the market by June 2016. As I write this, it’s already June and there are no signs that this is about to happen.

Wiko is wobbly

Wiko, which also entered the market with a bang, is, according to insiders, on suicide watch. After the exit of top managers of its local operations, all is said to not be well at the brand that traces its roots to France. Ironically, Wiko’s latest smartphone in the Kenyan market is the Fever, a 5.2-inch smartphone that glows in the dark. A fever may be what the company is suffering from locally if I am to be modest.

Others just flew away

Another mobile phone brand, Fly Mobile, never took off. After teasing a launch and even piloting at least two devices through Jumia (one of which I even got to play with), the company quietly crept back to oblivion.

To show just how dynamic the Kenyan market can be, Fly Mobile’s sister brand Wileyfox is testing the market’s waters with a long pilot of two devices, the Storm (which I reviewed here) and the Swift. With the availability of the devices limited to one online store and a few other outlets in the city (Nairobi), it’s a wait and see situation for the young British brand in its quest to unsettle the Chinese who seem to have properly understood and cornered the Kenyan mobile phone buyer.

Xiaomi is putting together a war chest

Xiaomi, the Chinese device brand that is the latest to enter the continent was slowed down by legal suits filed by Mi-Fone. However, with the Nigerian impasse almost handled, the intellectual property infringement accuser reportedly on its deathbed and a software to fix the M-PESA issues that delayed its Kenyan rollout by months at hand, the brand is said to be keen on bringing its latest smartphones including the budget Redmi Note 3 and the premium Mi 5 to Kenya and Africa at large. This is in addition to what we expect to be considerable spend as Xiaomi seeks to upset the status quo.

Nokia is coming back

Another member of the old guard that succumbed to the global market’s shifting loyalties and the dawn of a new age of apps and platforms it had failed to envisage, Nokia, is waiting on the sidelines to rejoin the main action. According to our sources, Nokia (the new Nokia) has been reaching out to former employees of the old company in East Africa as it prepares for takeoff in this market as soon as early 2017.

According to data in our possession from credible market sources, Nokia is still the third force of mobile phone brands in Kenya after the duopoly that is Samsung and the Transsion brands (Tecno, Infinix and iTel) thanks to the many feature phones it has managed to sell as part of Microsoft’s broad strategy to keep its hold of the market it had inherited from Nokia and which had made the Finnish company very popular locally.

Samsung + Tecno + Infinix = Current Dinosaurs

Put together, Samsung and the Transsion brands, Tecno and Infinix, account for nearly 70% of the smartphone market share in the country leaving little for the other smartphone brands to share including Huawei which has not been discreet about its ambition to net at least a quarter of the smartphones sold in Kenya this year.

With that in mind and the pressures from an increasingly financially overwhelmed Kenyan for lower prices on devices, the margins are even tighter than most would imagine when setting out to woo Kenyan consumers. As such, new entrants into the market are mostly doomed before they even start. The latest exits and the looming ones are sufficient proof.

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