For African market, Samsung will Buy Tecno Smartphone Maker

For African market, Samsung will Buy Tecno Smartphone Maker

I do not like to create tension except the day I said that Konga should sell itself, and within days it sold to Yudala. I had looked at the upgraded strategy they unveiled days before, and concluded that it was game over.

Today, I write that Samsung will buy Transsion (makers of Tecno phone brand), within the next five years, because Transsion is beating everyone in one spot on earth where smartphone has upward momentum.

Global shipment of smartphone declined in 2016 and 2017; data for 2018 yet to arrive but Apple alarm does indicate it would be the same trajectory. But in Africa, Transsion is eating Samsung on the battle of the supremacy of smartphone.

The power of multi-SIM cards. Quartz chronicles the power of Transsion, the company behind Tecno brand in Nigeria and across Africa. Market watchers expect Tecno & Co to hit 55% of the market share by next year. Below, I summarize the key takes from the piece: affordable pricing, regional marketing, good product and innovation in local necessities. That multi-sim is key.

In 2018, Samsung is expected to lose up to 6% (from 27%) of market share in Africa. Transsion will hit 35% (from 28%), and is projected to hit excess of 50% by 2021 because it delivers many things at once: affordable pricing, regional marketing, good product and innovation in local necessities like multi-SIM cards.

Tecno inspires me on how to build and run a hardware business in Africa: fashionista pricing does not work! This is one company you must study; it has proven that Africans do not care on brands when pricing makes no sense.

I expect Samsung to buy the Tecno maker in the next five years as smartphone market matures in the developed world.

Source: Quartz

 

Update: I added this in the comment section while replying to a comment. “If Samsung cannot grow in U.S. and Europe*, the only remaining place is Africa. Samsung has no market share in China. It has struggled in Japan. And in India, Chinese firms are now winning there. So, if you look critically, it is only Africa that it has as a growth market.”

Samsung market share is about 1% and is included in others in China. (source: counterpoint)

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Any company selling products knows where it has competitive advantage, which also includes the sort of people that make of the population of those markets.

The world is not flat, and it’s not really necessary for a particular company to cater for the whole world, the cost could even outweigh the gains. Premium products are largely for North America, some parts of Europe and Asia, Africa is never part of the equation; and those who have Africa in mind know what to do.

As for whether Samsung would buy Transsion, how about Samsung selling off its smartphone division to Transsion? These are possibilities. Nothing much is happening in the smartphone space, soon all of them would look similar, so I do not really expect any of the tech giants to hedge its future on number of smartphones sold. Smaller companies can take care of the smartphone business, the big guys must pivot to something else, with higher barrier to entry.

These are changing times, those who know how to create the future are already busy figuring out the next big thing


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9 thoughts on “For African market, Samsung will Buy Tecno Smartphone Maker

  1. I love your insight bro. But I doubt the possibilitties of your projections. Konga was already having their challenges before the takeover by Yudala, and unless Samsung is willing to buy the entirety of Transion mobile comprising of itel, Infinix and the mentionedTecno, which is somewhat impossible for busines sailing well. But again, five years is a long period enough for anything to happen. So let just wait and see.

    Nice article though.

    Reply
    1. Thank you. You are right – anything can happen. If Samsung cannot grow in U.S. and Europe*, the only remaining place is Africa. Samsung has no market share in China. It has struggled in Japan. And in India, Chinese firms are now winning there. So, if you look critically, it is only Africa that it has as a growth market.

      Reply
      1. You are wrong. Samsung has the biggest market share n China in terms of smartphone sales. About 26%. Although it’s dropping and Huawei is catching on. And to say Samusng cannot grow in Europe and US is blasphemy..

        Reply
        1. “And to say Samsung cannot grow in Europe and US is blasphemy..” It can because Huawei is blocked strategically. I did add * on that US and Europe one. If you allow Huawei in U.S. freely, Samsung will lose market share.

          On Samsung commanding 26% in China, I think you have a typo. Samsung has about 1% in China as as Q1 2018.https://www.counterpointresearch.com/china-smartphone-share/ I hope you are not in fake news. I do not accept it here please. Share your source for 26%.

          Reply
  2. I don’t think that will happen. In five years people will realise Tecno and Infinix actually offer nothing especially if they stick to Mediatek as a chipset provider. Other phone manufacturers like Xiaomi, One plus, Leagoo and even Huawei are going to drive Tecno sales down even as Nigerians are beginning to realise how poorly builted and software bloated Tecno devices are.
    Samsung will be foolish to buy them. No value there. Rather just open an assembly plant in Africa like Xiaomi did in India.

    Reply
    1. Sure – this is a better comment than the 26% claim. I am sure if it was that easy, Samsung would have found a way. Yet, if winning Tecno forces Samsung to open a plant in Africa, Africa wins. That works even better.

      Reply
      1. Yeah you’re right Samsung sales are in the decline in China and is indeed around 1% but they still sold the highest number of phones in the last quarter around the world I mean. It is indeed a worrying sign but like I said I don’t think buying Transission is a good idea. Personally I have left Samsung and I am on the Xiaomi train. Best value at the best price. If only the Nigerian government can wise up and force smartphone makers to open assembly plants in Nigeria including Transission. Thanks for the clarification. I was commenting based on outdated data.

        Reply

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