Digital Inclusion - A Profitable Business?

Digital Inclusion: Phones

Does Mobile Technology Drive Digital Inclusion?

The role of vendors and developers

EXCEED is the world's first mobile record-keeping solution specifically targeting micro-entrepreneurs. It was conceived, piloted, developed and launched in South Africa. Among other unique features, it boasts a native app to allow offline capturing and temporary data-storage. Fewer app-developers nowadays choose this route. Our recent upgrade of EXCEED made us once more aware of the reasons for this trend. This post addresses some of the issues why the hardware and software developments dominated by the world's richest countries hinder the breakthrough mobile phone technology can offer in Africa.

 

One Billion Mobile Phone Owners in Africa

Market research headlines hail that by 2023 Africa will have one billion mobile phone owners.The same source claims “Mobile broadband subscriptions are forecasted to grow by 16% a year to 880 million by 2023 from 350 million today. “ It is not mentioned in this article, what types of phones African users will have. In our experience, Toby Shapshak is far closer to reality:

“Feature phones have been a key driver in Africa being a mobile-first continent – now making up 56% of market share – and continue to outsell smartphones, according to researchers IDC. “

For the vast majority of Africans, a smartphone and a broadband subscription is out of reach . And as previously discussed, basic GSM signal coverage is not available in many parts of Africa, particularly rural areas. 4G availability being almost a standard in developed nations, is still limited. Thus, feature phones are still seen as a better option, when compared to cheap, often less durable smartphone offerings.

 

The digital divide

In Europe, two vendors share almost 60% of the mobile phone market (Statcounter, Global Statistics) and neither one of them makes feature phones. Those same vendors together have 39% market share in Africa and 40% in Asia. The same source shows vendors dominating the African market that do not even appear in the European or US statistics. Hardware technology plays a pivotal role in the development of software which in turn impacts most of our lives nowadays. This becomes very quickly obvious when the Windows 10 OS is run on a desktop on which Windows XP used to run!

In Africa, 61.5% of all devices are mobile devices and only 36% are desktops, a stark contrast to Europe, where only 40.5% are mobile and 50.4% are desktop devices. The mobile hardware technology mostly originating in the US, South Korea and China, drives operating systems and software-app technology enabling software developers to launch apps that can do more, use more of the processing power and memory available on the latest phones and subsequently consume more battery power. Subsequently, we experienced how upgrades to other apps on our test-phone have gradually outstripped its 500 MB RAM memory. Finally, all it could do was running the app to access an app-store!

Memory is expensive, as we subsequently discovered purchasing a new test-phone. Therefore more affordable phones tend to have less memory forcing its owner to sacrifice storing music and pictures for messaging, banking, trading and other life-enhancing apps. This is a double whammy in emerging countries where the mobile is often the only electronic device users have. In contrast, users in high-income nations have access to a variety of storage options while owning phones with lots of memory.

Battery time remains a particular challenge in countries where many have limited access to power, are far less likely to have access to charging points in homes, air-conditioned offices or cars. In addition, simple repairs like battery replacements are no longer possible in sealed phones adding to electronic waste most developing nations are unable to recycle.

How affordable are phones from a South African perspective? Major phone vendors have recently launched low-priced, low-spec smartphones on slimmed-down OS versions. The latest is sold for just under R1000 in South Africa. In 2018, the food poverty line was determined to be R547 per month by Stats SA. Less than 3 years ago, 25% of the population lived at or below this level. Over half of the population had less than R992 monthly to live on which inflation adjusted in 2018 is R1183. Indeed, even a cheap smartphone is out of reach for many.

 

OS upgrades and support have short lives

Phones in Africa have to last a lot longer than in richer nations, where phone-upgrades are included in the renewal of subscriptions. The majority of mobile phone owners in emerging economies have no access to broadband subscription plans that include phones due to a lack of proof of income, no credit records or bank accounts or security. In order to own phones from a major brand, many aspiring business owners from our target group resort to flourishing second-hand markets for older phones from well-known brands. In many cases, access for older phones to apps on the major online stores is limited as their OS are no longer supported and the phone cannot be upgraded. At the time of writing, Apple's value reached the 1 Trillion Dollar milestone. To maintain access to their app-store and security of the phone, users are forced to buy new phones regularly. Apps supporting older OS versions in their store are blocked. Apart from downward compatibility not always guaranteed, native app developers supporting older OS versions are prevented to make their apps available via this channel. Subsequently, we are unable to offer a native iphone-app version of EXCEED for older iphones.

Likewise, it has become difficult to develop app versions for feature phones as conversion tools maintained by US or European developers are no longer available. EXCEED still has an app for feature phones, albeit for the reasons mentioned, it has not been possible to upgrade it.

As a result, app-developers shy away from native apps and offer browser-based apps requiring online access instead. The issues of costs and access have been discussed previously.

 

How can vendors and developers contribute to digital inclusion?

Besides being a communication tool, for the majority the population living in the developing world, the mobile phone offers the only way to online access and life-enhancing services. Therefore one could argue that the growing user numbers have indeed reduced the digital divide. However, under the hood, challenges remain and new challenges emerge. Those you have access to multiple digital devices own smartphones with strong processing power and more than sufficient memory while the majority without access to any other device can hardly afford a feature phone doing little more than just calls. It seems to us that hardware and OS developments mostly originating in the US, China and South Korea are turning a blind eye to the needs of emerging economies for the sake of profits. To reduce the digital divide (and electronic waste), the usefulness of phones need to be extended. This can be done by

  • making phones users can exchange batteries and add memory

  • make OS upgradable

  • support mobile OS for longer periods to give second-hand mobile phone buyers access to the apps; this can be restricted to specific regions only

  • allow app-versions for older OS to be made available via the app-stores

  • encourage and subsidise developers of apps for feature phones

Mobile users in emerging economies are tomorrow's market for many leading mobile phone manufacturers. It should be in their interest to give them a pleasant experience of using their phones, albeit older and second-hand. This would also assist local developers in emerging countries to provide more life-enhancing solutions to facilitate digital inclusion.

Sources:
https://qz.com/africa/1127274/one-billion-people-in-sub-saharan-africa-will-have-mobile-phones-by-2023/

https://www.forbes.com/sites/tobyshapshak/2017/03/28/feature-phones-still-rule-in-africa-as-smartphone-sales-slow/#3851f84260e5

http://gs.statcounter.com/

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