The 22nd Century: The African Century?Posted: December 12, 2012
There are many basic things that still missing for most if many of the people who live in the continent of Africa. To be sure there are many areas of progress and enormous diversity of conditions — good and bad — in that huge and complex region of the world. A recent article by Iain Marlow on the position and prospects of RIM in the developing world (it has a strong brand position and market share in these high-growth markets) highlights the potential of several of the countries in Africa such as Nigeria.
A 23-year-old student who works part-time as a driver to Lagos’s wealthier citizens, Mr. Kumbin is exactly the type of customer these smartphone makers are trying to reach in the developing world, where a fast-rising middle class spells huge opportunity.
For shoppers in Lagos, though, the choice for a wireless device is an easy one.
“Every young teenager’s dream is to own a BlackBerry phone,” Mr. Kumbin says. “It’s very popular with students, businessmen. But more people are buying BlackBerry – more people come for it everyday.”
In countries such as Nigeria, far from the iPhone-toting masses of the developed world, BlackBerry remains king among smartphones.
The BlackBerry is not only the No. 1 smartphone in Nigeria, but it’s also tops in all of Africa, according to research firm Canalys. The story is much the same in Mexico, Indonesia and many of the world’s other booming emerging markets, where RIM leads nascent smartphone sectors with as much as a 60-per-cent market share.
With more than 170 million people, Nigeria is Africa’s most populous nation. About one out of every six Africans is Nigerian. The BlackBerry has proven especially popular with African youth, and Nigeria just happens to be an incredibly young country: Roughly 40 per cent of the population is aged 14 and under.
The country also boasts the continent’s second-largest economy after South Africa, and one that is growing rapidly. A Citigroup economist predicts Nigeria’s economy will grow at an average rate of 6.9 per cent until 2050. Because there’s almost no land-line phone infrastructure, mobile growth has been explosive. There are roughly 100 million mobile phone SIM cards out there, although the number of actual users is something far less since networks are so congested that many people carry multiple phones.
Chidera Anukam is an 18-year-old student in Lagos with dyed purple highlights and 1,002 friends on BlackBerry Messenger. She uses RIM’s proprietary texting service to blast out party invites to all her BlackBerry-using peers. If you don’t have a BlackBerry, you’re unlikely to hear from her. “It’s very, very fashionable to have a BlackBerry,” she says, “especially if you have fancy pouches and, maybe, bedazzles on it, like mine.”
In Nigeria, comments like this are common, but in Ms. Anukam’s case, they are also officially sponsored. She is one of three BlackBerry ambassadors at the University of Lagos, and went through six arduous auditions for the privilege.
She’s responsible for creating an ostensibly grassroots buzz about BlackBerry by hosting parties around soccer matches and sponsoring events such as music competitions – the winner of one is being sent to a music school in London. There are teams of three students in each of the major Nigerian cities of Lagos, Port Harcourt, Calabar and Abuja, the capital. It is just one of the local strategies RIM is pursuing to maintain buzz as more people in Nigeria, especially young people, upgrade from “dumbphones” to smartphones.
Previously, the RIM team handling Nigeria was based out of Johannesburg, around 4,500 kilometres away in South Africa. Executives would make the roughly six-hour flight every few months to meet with carriers and manage the blossoming business. It was clearly not enough: RIM needed people on the ground. In late September, RIM officially opened an office in Lagos.
“In North America, and perhaps Europe, everything is done by contract, whereas here a lot of value is still placed on relationships,” says Waldi Wepener, RIM’s regional director for East, Central and West Africa. “We’ve decided to open an entity here so we can get closer to our customers and have more regular face-to-face meetings with them and build those relationships.”
But to win lots of new customers, prices must be kept low – a sign of the difficulty ahead for RIM to make good profits in the developing world.
With Nigeria’s carriers, such as Airtel and MTN, RIM has negotiated low-cost, monthly data plans like the 30-day, BlackBerry Complete plan that costs only 1,400 Naira (less than $10). Even cheaper, at 1,200 Naira, is a BlackBerry Social plan that gives access to BBM, Facebook and Twitter.
On Nigerian radio, RIM’s competition is already coming in loud and clear. “No power?” a booming, baritone voice yells in one commercial. “No problem!” It’s an advertisement for a fridge made by Samsung, the vertically integrated South Korean conglomerate with around 220,000 employees. This particular fridge, with three hours of backup power, has been custom built for Nigeria’s daily power outages. And in a sign that the company is dead set on taking share: The fridge comes with a free Samsung smartphone.
When RIM CEO Thorsten Heins refers to “pressure” in emerging markets, he is mainly talking about Chinese companies such as Huawei Technologies, ZTE and Tecno. Few Westerners have heard of such names, but Tecno, for example, is ranked by IDC as the third-largest provider of simple mobile phones in Nigeria, behind Nokia and Samsung.
“The Chinese phones here are crazy, and they’re very aggressive – unknown brands you’ve never heard of,” says Wael Ammar, chief commercial officer of Nigeria for Etisalat, a major Middle East and Africa wireless carrier. “This is the new wave of smartphones.”
Nigeria is already a country with 170 million people. The Economist newspaper projected the population of several high-growth countries. The results are startling.
America’s population, now 310m, is likely to rise to 400m in 2050 and 478m in 2100.
China’s is forecast to fall by 400m between now and 2100.
Russia’s population is now 142m; Afghanistan’s slightly more than a fifth of that; Niger’s barely a tenth.
But by 2100, Afghanistan is forecast to have the same population as Russia (111m) and Niger will be larger. Sub-Saharan Africa’s current population, at 856m, is little more than Europe’s and a fifth of Asia’s. By 2050 it could be almost three times Europe’s and by 2100 might even be three-quarters of the size of Asia. By any measure, Africa is by far the fastest-growing continent.
By 2050 Nigeria could have a population larger than the U.S. and over 700 million by the end of this century.