How African markets are primed for explosive growth in mobile tech

Today, everyone wants to know what the future of mobile will look like. One interesting way to think about it is to see where there can be disruptive innovation.

There are basically two ways innovation spreads through a market: from the top down, and from the bottom up. From the top down, an expensive innovation enters the market as a premium product and, as technology improves and economies of scale kick in, spreads down until it’s in everyone’s hands. That was how the automobile became so ubiquitous.

But there’s bottom-up, or disruptive innovation, made famous by Clay Christensen: a new product comes with fewer features, at a lower price point, and aimed at an underserved segment of the market. As the technology improves and becomes more affordable, parallel with growth in the market, that new innovation eats up more and more value. So far, the smartphone has been a top-down story.

Hence the question: given how often disruption happens in the broader technology industry, is there a place where it could start in the mobile industry?

Today, the richest markets in the world—North America, Europe, East Asia—are awash in smartphones. But everyone is now talking about the next frontiers in emerging markets like Brazil and Southeast Asia. But what about after that?

Enter Africa.

The market for mobile technology in Africa exhibits some of the key, telltale signs of fertile soil for disruptive innovation. It is underserved. Though buyers prefer cheaper products, there are plenty of them. And these buyers have specific needs that aren’t being met by the main service providers and device manufacturers.

In Africa, key issues revolve around not only cost, but also power consumption and connectivity. To make cheaper phones, manufacturers equip the device with less memory. But that requires an OS that is specially designed to be very economical in memory. Google is well aware of this risk, which is why it has announced Android One, a version of Android for these markets. But as the history of countless companies reminds us, being aware of a disruptive risk and being able to execute on it are two different things.

What is top of mind for Google execs? Is it winning Africa, or is it matching the latest whizbang features in iOS 17? If the latter, a disruptive challenger can still come in with a more fitting product and essentially eat the market from the bottom up. (This is basically Firefox OS’s strategy, as best as I can tell.)

A classic example of something like this is the power bank phone that’s taking over Ghana. It’s quite cheap, and far less sexy than an iPhone or a Galaxy. But it provides features well-suited to African markets, such as multiple SIM slots and a power bank (portable, long-lasting battery packs specifically designed faulty power grids in parts of the continent). Data-sipping versions of Facebook and WhatsApp preinstalled, too.

Here are some other ways African mobile tech could be disruptive:

1) Payments. This is by now a familiar story. Countries like Kenya are very far ahead of the developed world in terms of adopting mobile payments. With services like M-Pesa, and others, people can store money in their phones and transfer amounts to other people with a few taps; paying for cabs, bar tabs, and even utilities and taxes. Today, the amount of money transferred using mobile phones represents more than a quarter of Kenya’s GDP—an astonishing number. This is another example of “leapfrog” innovation: the reason why Kenyans all flocked to mobile payments when they became available was because many didn’t have bank accounts, but they had phones.

2) Omnipresent wireless broadband. Bringing mobile phone service to the African continent required a lot of innovation. Cheap, durable routers and networking equipment had to be invented and manufactured. An unreliable grid had to be worked around. (Many cell phone transmitting stations are solar-powered, an innovation that is slowly making its way to the developed world.) Redundancies had to be built into the system for contingencies. Upgrading that infrastructure to broadband will be a lot easier than building it in the first place. I wouldn’t be surprised if, in the near future, we see faster mobile internet in Africa than in many other places in the world.

3) Health. Africans are leapfrogging the West because of poor infrastructure—in this case, a dearth of doctors and other medical services. Africans are already turning to mobile technology for health information, on platforms like MAMA and other health services.

4) Commerce. Once more, lack of infrastructure, in this case retail, is leading to leapfrogging. In the West, ordering something on your smartphone and then picking it up from a locker is still experimental. It is more developed in places like South Africa. With fewer brick-and-mortar megamalls, and with an already high penetration of mobile payment services, it makes sense that “m-commerce” innovation will happen first (and grow fastest) in Africa.

When we think “future of mobile,” we don’t typically think about Africa. But then again, before 2007, we didn’t typically lend Apple much consideration either—and look what happened. In other words, when it comes to the next big thing in phones, don’t underestimate this part of the world.lacan

This article is published in collaboration with Quartz. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Pascal-Emmanuel Gobry is a writer and fellow at the Ethics and Public Policy Center. He lives in Paris.

Image: A man makes a call on a mobile phone in Sierra Leone’s capital Freetown. REUTERS/Simon Akam