Lenovo Group Ltd., a Chinese multinational technology firm based in Beijing, will introduce its first smartphones for Africa in an effort to expand into markets where the company can conduct business directly with its customers.
While the world's second-largest PC vendor expects the phones to be available by the end of 2013, the company has chosen Nigeria as its specific point of interest, mainly because, unlike in South Africa, it doesn’t have to work with local telecommunications companies to sell its handsets. Nigeria is the continent's second-largest economy behind South Africa.
As the global PC market is experiencing lackluster sales, Lenovo is developing mobile devices such as smartphones and tablets to capitalize on vulnerable consumers who it hopes could be lured away from its popular competitors, Apple Inc. (Nasdaq: AAPL) and Samsung Electronics Co.
Nigeria, Africa’s most populous nation with more than 160 million people, had about 113 million wireless subscribers at the end of 2012, according to data compiled by Bloomberg. Furthermore, it would seem that Lenovo is making the right move at the right time as the number of smartphone users is expected to grow to more than 35 million by the end of 2017 from 5.6 million at end of last year, according to research by Informa Telecoms & Media.
“The growth is fuelled by the declining prices of smartphones, the expansion of data networks as well as competitive data pricing,” Thecla Mbongue, an Informa Telecoms & Media analyst, said in an email to Bloomberg.
Lenovo will sell its smartphones across as many as six price bands in Nigeria, where some could retail at about $500, Oliver Ebel, vice president and general manager of Lenovo Middle East and Africa, told Bloomberg.
After Nigeria, Lenovo will target Egypt as part of its African expansion, Ebel said. “It’s a huge population as well with huge smartphone growth and it’s an open market,” he said. Egypt has a population of about 84 million.
Lenovo shares rose 0.2 percent to HK$6.85 at the close of trading in Hong Kong. The stock has slipped 2.4 percent this year, valuing the Beijing-based company at HK$71.5 billion ($9.2 billion).
My name is Carey Vanderborg and I'm a journalist working in New York City. I love food, travel, craft beer, live music and writing about all of the above.