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.
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.”
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
Click to join Tekedia Capital and build Next Africa with min of $10,000 co-investment in startups.