Kenya to become a manufacturing centre for low cost smartphones in Africa

Shenzhen TeleOne Technology, a Chinese subsidiary of a group which  makes batteries, has joined hands with Kenyan network operator Safaricom and a local internet service provider Jamii Telecom to produce low-cost smartphones in Kenya. The assembly plant, which is already in the advanced stages of completion, will be located within the Konza Technopolis, a 2,000-hectare former cattle ranch situated about 70km south of Nairobi. Konza Technopolis aims to be a hub for business process outsourcing, software development, data centres, and light manufacturing. 

The production facility brings to fruition the vision of President William Ruto to fast-track digital inclusion by manufacturing the most affordable smartphones in Africa.  Less than 50% of mobile phones sold in Kenya currently are smartphones, despite being one the earliest adopters of e-payments in the world.

In November of last year, Ruto made the initial announcement regarding his administration's plan to produce a smartphone priced below KES5,000 (approximately US$35). The objective behind this initiative is to ensure that all Kenyans have access to government services and business platforms through digital means. 

According to the Communications Authority of Kenya's sector statistics report for Q4 2022, there were a total of 63.4 million mobile phones in the country of 52 million people. Out of these devices, 53.1% were feature phones, while 46.9% were smartphones. Figures from the International Data Corporation (IDC) reveal that in terms of new devices sold, Samsung held the top position in Kenya's smartphone market in Q4 2022, commanding a unit share of 31.7%. Tecno and Infinix, both owned by China’s Transsion Holdings, were in second and third places respectively, with an 18.8% and 9.2% share respectively. Samsung's success in the market was attributed to its distribution through the M-KOPA asset-financing platform, which enables underbanked customers in Africa to purchase products like smartphones.

According to IDC data, Kenya has seen a second consecutive quarterly decline in smartphone imports in Q4 2022, with shipments falling by 13.5% year on year. The decrease was attributed to supply shortages, inflationary pressures and a weaker Kenyan shilling which contributed to higher import costs and increased retail prices. As prices for essential goods rose, it led to tighter budgets for technology products. Additionally, smartphone distributors exercised caution by reducing investments and inventory levels due to price fluctuations in order to mitigate potential losses.

ICT Cabinet Secretary Eliud Owalo recently emphasised that the high cost of smart devices has posed a significant obstacle to achieving digital inclusion, thereby highlighting the necessity of local production. Alongside enhancing connectivity through affordable smartphones, the Kenyan government's digital transformation agenda also seeks to improve internet access for its citizens. To achieve this, it intends to deploy 100,000kmof fibre-optic infrastructure, establish 25,000 wi-fi hotspots, and create 1,450 ICT hubs in every ward across the country.

 

References

‘Kenya to manufacture Sh5,000 smartphones, President Ruto says’, Capital Business, 10 November 2022

‘Kenya's smartphone market continues to contract, but mobile financing schemes offer ray of light for the future’, International Data Corporation, 10 March 2023

‘World Economic Outlook Database’, IMF, April 2023

‘Kenya set to become Africa's high-tech hub’, China Daily, 25 May 2023

‘Chinese firm in Kenya-made smartphones project revealed’, Business Daily Africa, 21 June 2023

‘ICT week stirs dialogue on digital inclusion as ICT CS Owalo says low cost phones on the way’, Communications Authority of Kenya, 23 June 2023