• Sunday, June 16, 2024
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Why made-in-Nigeria smartphone remains a puzzle

Why made-in-Nigeria smartphone remains a puzzle

Ever since it issued its first GSM licences in 2001, Nigeria has nursed an open ambition to have a phone manufactured locally.

But it wasn’t until 2013 that it received a pledge from a major smartphone manufacturer – Tecno. Nigeria is the largest market for the Transsion-owned Tecno brand in Africa. Hence, many were not surprised when on May 7, 2013, during the launch of Tecno P3 smartphone into the Nigerian market, Arif Chowdhury, Tecno Group’s vice president, said part of its long-term plans was to build a manufacturing plant in the country.

When BusinessDay queried what had happened to the pledge last week, the company suggested that opening a plant in the country may not be on the cards just yet.

“Rest assured that the brand will communicate such plans if and when they come up anytime through an official statement from the authorised spokesperson,” the company said.

Nigeria becoming a manufacturing hub for mobile devices – possibly the first in Africa – holds many benefits, including new employment opportunities, revenue generation, increased smartphone penetration, and becoming a significant power bloc in the industry’s supply chain, at least in Africa.

Nigeria is ranked as the country with the seventh-highest number of mobile phones in the world. With 167 million phones, the country has the largest mobile market in sub-Saharan Africa. The sector’s contribution to the gross domestic product of the country is also significant at 12.85 percent in the third quarter of 2022. The country also accounts for 302.923 million SIMs as of May 2022 and about 132 million unique devices on the telecommunication network in 2020. Both SIM cards and mobile devices are manufactured outside the continent, which means the country earns nothing except excise duty from importing them.

Importantly, countries that are rightly positioned in the market are able to ride the tide when there are headwinds. For example, the cost of mobile devices has gone up in recent times due to disruptions in the global supply chain.

According to the latest Worldwide Quarterly Mobile Phone Tracker forecast, shipments of smartphones will decline 9.1 percent in 2022, a reduction of 2.6 percentage points from the previous forecast. As a result, International Data Corporation (IDC) expects smartphone shipment volumes to total 1.24 billion units in 2022. While a recovery of 2.8 percent is still anticipated in 2023, IDC did reduce its 2023 smartphone forecast by roughly 70 million units, given the ongoing macroeconomic environment and its overall impact on demand.

“We believe the global smartphone market will remain challenged through the first half of 2023, with hopes that recovery will improve around the middle of next year and growth across most regions in the second half,” said Ryan Reith, group vice president with IDC’s Worldwide Mobility and Consumer Device Trackers.

A country like the United States is able to hedge against the headwinds by supporting its companies such as Apple to access scarce materials which enables it to continue its production activities until the market is back in full swing.

Markets like Nigeria with no manufacturing capability and low-income levels are often the most impacted. Egypt, Algeria, and South Africa all have phone assembly factories whereas Rwanda said its Mara Phones are manufactured entirely in the country.

Some companies have in the past said they were launching a made-in-Nigeria smartphone. For example, Ankara K2 smartphone launched by Imose Mobile in 2015 and Plirisblazex-64 released into the market by Pliris Mobile Limited, a tech company founded by Oluwafemi Alade, all said their mobile devices were the first made-in-Nigeria phones. Those never made it to the mainstream market and have since not been seen on phone shelves.

Read also: Explainer: How to turn your phone into a bank

In 2017, it was the turn of AfriOne to roll out the red carpet to welcome a “first-ever Nigeria-made phone”. A Guardian Nigeria report announcing the device said: “More than 15 years after Nigeria joined the global system for mobile communications, the first made-in-Nigeria phone has finally debuted, thus throwing the country into the growing league of communication gadgets manufacturers.” At the time AfriOne said its phone was manufactured in Nigeria, it had an office along Oshodi Expressway in Lagos State where it assembled smartphones and other devices from imported components. Importantly, its devices are rarely sighted in any of the major mobile device markets in Nigeria’s cities.

Also in 2017, Solo Aspire, a series range launched by Solo Mobile, a subsidiary of Bell Canada, was described as a made-in-Nigeria smartphone.

The government also conducted a made-in-Nigeria phone public launch when on June 10, 2021 President Muhammdu Buhari received and displayed what was described as the first made-in-Nigeria phone, ITF Mobile, on national television. Niyi Adebayo, minister of industry, trade, and investment, said the ITF Mobile was one of 12 phones manufactured locally by the Electrical/Electronics Technology Department of the Industrial Training Fund’s Model Skills Training Centre.

Ifeanyi Ifak Akubue, president of Phone and Allied Products Dealers Association, said after the public display of the phone, nothing has been heard about it.

According to him, investments in manufacturing phones locally are not being deployed because of many considerations. One of them is the country’s business environment, which many investors see as stifling to businesses, especially for manufacturers.

“There are a lot of indigenous individuals as well as foreign investors that are willing to take up this project of smartphone production in Nigeria but they are crippled with the fear of a potential crash of their business due to the current Nigerian economy,” Akubue said.

“Nobody wants to invest a ton of money into a business and obtain major losses but with the instability of the Nigerian economy, it seems as though that might be the case and with that factor hanging in the air, it would almost be impossible to embark on such a project,” he added.