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South Africa's First Smartphone to Hit Shelves in 2014


A woman, draped in a cloth with an image of former South African President Nelson Mandela, uses a mobile phone during Mandela's funeral at his ancestral village of Qunu in Eastern Cape province, south of Johannesburg, Dec. 15, 2013.

A woman, draped in a cloth with an image of former South African President Nelson Mandela, uses a mobile phone during Mandela's funeral at his ancestral village of Qunu in Eastern Cape province, south of Johannesburg, Dec. 15, 2013.

Smartphones are growing in popularity in South Africa, but their expense and the cost of contracts have meant only a fraction of the population can afford them.

One South African plans to change that by introducing the first indigenously designed and manufactured smart phone, aimed at attracting lower middle class consumers.

South Africans love their mobile phones. According to a recent Afrobarometer report, 93 percent of South Africans have one.

But 80 percent of these phones are feature phones, simple handsets with a number keypad, which can be used to dial numbers and send text messages.

Dr. Thabo Lehlokoe wants to change that.

Early in 2014, his company, Seemahale Telecoms, in partnership with manufacturer CZ Electronics, is bringing a new smartphone to South Africans that will retail at around $230.

"There's a lot of people that are currently on feature phones, but would love to have a smartphone but can't afford to have one on the current pricing. We then noticed that there is actually a band, a niche band that we can come in and support," Lehlokoe said.

Apple's iPhone will cost a consumer about $1,000, without a two-year contract that would typically lower the phone's price. A buyer will pay about $800, without a contract, for a Samsung Galaxy.

Consumers like Terrence Mathoma say it is expensive, but South Africans - who can afford it - are tempted by high-end brands.

"For R2500, well the phone has to appeal to a lot of people for us to buy it…..
My phone, I had to take it out on contract because they wanted something like R8,000 up front, and then you look at taking it out on contract, you look at the packages which they give you," he said. "It weighs out it being better to take it out on contract. As opposed to having R8,000 up front. That's a lot of money."

Locking into a contract can also be expensive, as phone minutes and data plans are costly. For $47 a month, one iPhone contract buys you 75 minutes per month and 200 megabytes of data.

For most lower income South Africans, a contract is not in the cards. Instead, they just buy pre-paid minutes. And that is where Lehlokoe is aiming his new phone.

"The idea was that we were trying to make this thing relevant for our market," he said.

He is hoping the price - at just $238 - and the fact that the phone is designed and manufactured in South Africa, will be selling points.

"There’s a lot of people that actually appreciate the fact that when these phones are manufactured here. We are going to be creating a lot of jobs locally - that on its own is a serious value add that the other guys cannot provide," he said.

The phone will be manufactured in Midrand, a suburb north of Johannesburg, and the factory should employ a couple of hundred people to start.

Lehlokoe hopes the phone will bring more South Africans online - in a country where two-thirds of adults have never used the internet.

Tshepang Makofane, a smartphone owner, said he would like to see more opportunities for the poor to access information.

"Smartphone penetration in South Africa is really huge. I'm more interested in the low end, the people in the low end LSM getting access to all this technology. I think it's like a great opportunity for them to come on board as well," said Makofane.

Dr. Thabo Lehlokoe is hoping consumers in that market feel the same way.
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