The Asian giant looks to Africa The most successful cellphone maker in China, Xiaomi, has announced its long- anticipated arrival in Africa next month by appointing a distributor. The continent has been the fastest growing mobile region for the past five years, and saw Q1 smartphone sales surge to 47%. Known as “the Apple of China” Xiaomi have aggressively grown their market share in China, ousting the iPhone from top-spot by selling slickly-designed Android handsets made from quality components but selling its handsets cheaply by reducing hardware profit margins. Instead, Xiaomi makes money through its apps and games store. Formed only five years ago, the company’s meteoric rise in its home country made it number three in global smartphone sales last year, behind Samsung and Apple. Founder and CEO Lei Jun is, who unveiled expansion plans early this year for the equally fast-growing Indian market, is considered a rock-star entrepreneur in Asia . Xiaomi has appointed Mobile in Africa Limited as distributor for the 50 countries that constitute sub-Saharan Africa. The company’s president is renowned tech entrepreneur RJ van Spaandonk, most recently executive director of Core Group , which distributes Apple in 14 countries in sub-Saharan Africa. “I think Xiaomi is currently the one of the most exciting mobile internet brands. It is very well suited to the needs and income levels of the emerging middle classes in Africa,” says Van Spaandonk. “There is a great need for mobile technology in Africa that is of top-notch quality but still affordable. What I found in Xiaomi is a company, and a business model, that can accommodate the needs of African consumers,” Van Spaandonk adds. The London-based GSM Association’s The Mobile Economy, Sub-Saharan Africa 2014 report found that “Sub-Saharan Africa has been the fastest-growing region over the last five years, in terms of both unique subscribers and connections … By June 2014, there were 329 million unique subscribers, equivalent to a penetration rate of 38%… [and] 608 million connections.” Mobile In Africa is setting up online stores in 14 countries, similar to the mostly- online sales strategy Xiaomi uses in China. “The brand is a mobile internet company. It has made its name selling directly to the public through online channels. We will try and replicate that as much as possible in Africa,” says Van Spaandonk. “What attracts me to the Xiaomi’s Mi brand is that they produce the highest quality product with the best available parts at the lowest possible price. For which there is an immense demand in Africa,” says Van Spaandonk. Xiaomi's Red Mi 2 and M4 Xiaomi is launching the Red Mi 2 (costing $160) and M4 ($320) in Africa next month. Two Xiaomi handsets will be available at launch: the Red Mi 2 (costing $160 / ZAR1,999, including import duties in South Africa) and the Mi 4 ($320 / ZAR3,999). When we reviewed these handsets at Stuff magazine, we were impressed. “The Xiaomi Redmi 2 looks like a Lumia and feels like it’s comparable in quality. In performance, it fares slightly better than most of Microsoft's entry-level phones,” wrote Brett Venter, Stuff’s online editor who has been reviewing Android handsets for the last five years. “The Xiaomi Mi 4 is similar, except that it looks and feels like an iPhone 5 – with the hardware grunt and software versatility of Android behind it. The Mi 4, when it first launched internationally, was very nearly the perfect phone.” Venter isn’t very easily impressed – that’s about as gushy as he gets. The discontinuation of Nokia’s former Asha handset range – which cleverly bridged smartphone functionality on cheaper mid-range handsets – after the Microsoft acquisition has left a once-in-a- lifetime opportunity for Android manufacturers to capture the 40% market share Nokia still commanded through its strong brand loyalty. Africa is known for its innovative use of the more rudimentary feature phones, about which I spoke at TED . But Android handsets are flooding Africa’s cellphone markets, accounting for 89% market share to Apple’s 7%. They are fuelling a shift from feature phones, sales of which declined 20% year-on-year in Q1, according to technology consulting firm International Data Corporation (IDC). Smartphones accounted for 47% of mobile phones bought in Africa in the first quarter, after a 66% year-on-year Q1 increase (selling over 36 million handsets), IDC reports in its Q1 2015 Mobile Phone Tracker. Total smartphone sales in the Middle East and Africa (MEA) region are expected to be 155 million this year, IDC says. “This comes at the expense of feature phones, which suffered year-on-year declines of around 20%,” IDC reported. “The growth in smartphones in the MEA region is being spurred by Google’s Android and Apple’s iOS, with the two platforms accounting for over 95% of the smartphones shipped in Q1 2015. Shipments of devices featuring these operating systems increased by a combined 67% year on year,” the report concluded. In South Africa, says Van Spaandonk, “over 50% of sales are smartphones. Kenya is close to that. Nigeria is 30%. Those three countries combined sell about 20 million smartphones a year,” he adds. “That’s a big opportunity. That’s more than the people of Holland and no one would dismiss the size of Holland as a market.” Once mighty BlackBerry – which negotiated uncapped data plans in Nigeria and South Africa where the Canadian handset had almost cult status for years – has slumped to 14% in Q1, according to IDC. “The strong growth in the region’s smartphone market is largely being driven by the emergence of low-priced devices that are primarily powered by Android. Indeed, almost half of all the smartphones shipped across Africa (45.1%) in Q1 2015 were priced below $100, while almost 75% fall under $200,” IDC reported. “Android is particularly dominant in the low to mid- priced bands, while iOS is mainly found in the $450+ price category.” Huawei, which was ousted from this quarter’s top three, is another Chinese brand doing well in Africa. The biggest- selling brands in Q1 were Samsung, Tecno and Apple, accounting for 55% of all smartphones sold across Africa, where Nigeria sold 14% and South Africa 12%. 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