Tecno; the second smartphones revolution for the entry level?

Tecno N3

Tecno is Kenya’s biggest handsets company at the moment, beating the giants Nokia and Samsung. This is due to the large business it has in the bottom of the pyramid, the dumb phones is where it has made it’s hugest impact.

But this is changing

Tecno has amassed strength to battle it out in the smartphone segment with the big boys. You realize shipments isn’t the money, money is in the margins, and if we are to go with revenues from the world’s biggest smartphone manufacturer, Samsung, the money is up there, the Galaxy flagship makes most of their money, even with mid range smartphones and low end smartphones selling in quite big numbers.

Tecno, a Hong Kong based company sells to Africa, not even to the far Asia and  South East Asia where you’d expect. That’s why you won’t see Tecno being covered in the large tech media ala The Verge, Engadget, GSMArena and the likes.

Africa, mainly Nigeria, Ethiopia, Kenya and Tanzania are where Tecno energies are directed.

And they are paying

Tecno has for some time shifted from just selling dumb phones to getting their feel of the smartphones business, but still in the entry level for quite some time. Up until when Tecno launched the Qualcomm powered Tecno N3, it was barely a notable contender in the business. But Tecno N3 happened, this being a Quality Reference Design device, changed things. A previous offering, the Tecno T3 wasn’t close in impact as the N3. Infact that’s the device that Kenya’s largest Telco, Safaricom decided to take on board, and Tecno was out there in the eyes of more than just the illiterate shopper in the back streets.

Tecno did not stop at the N3 which got good reviews and sales, they now got the morale to push the limits even further. Recently, they launched a 5 inch device that they claimed was aimed to compete with the Galaxy S III. How capable it is to upset the Galaxy S III is quite debatable, but it did make it’s mark. It brought the large screen to the low price, the user who wished to get the Galaxy S III could now get something similar in size at a lower price (the Galaxy S III is selling at around Kshs 45,000/ $500 while the Tecno Phantom F7 sells at Kshs 20,000 / $230).

The Tecno F7 is selling; Nigeria, Ethiopia and Kenya are reporting quite huge sales among retailers. This is to users who barely know what to expect in a smartphone and would have bought a no-brand somewhere with some speck of internal memory and other compromises like no updates or other essentials. According to Dikachim at TechCabal, Tecno just under-promises and over-delivers. Now I need us to fast rewind to a recent past.

It doesn’t last, ask Huawei

Some time ago when Android was quite new to markets like Africa, that’s during the times of Android 2.x, Huawei had a partnership with Google and Safaricom. A partnership that would see the Huawei Ideos U8150 sell slightly better than hot cake. What was involved was a subsidy that saw the smartphone sell at half price, Kshs 8000 / $91. This saw sales of over 300,000 Huawei Ideos U8150 from a single carrier, a device that wasn’t selling in the open market, in a market that considered a smartphone a luxury beyond reach.

Other device vendors like Samsung also reaped in the new found smartphone crave and offered upgrades for the Ideos experience at a higher price, this is what was the Galaxy Mini, selling at Kshs 16,000 / $183. And it did sell.

Huawei did not innovate and decided that the Ideos hype would grow into the next device they introduced, the Huawei Ideos U8185. Safaricom too felt the same and invested. But the story was different. The second Ideos did not sell, even with the low price. The market had changed and wanted more, more was with Samsung who added in extras to make the experience better. The smartphone shopper then had better expectations in the smartphone, other than just being able to sync email and play Angry Birds.

Things like internal storage, software updates, memory, hardware and design came into play (it would be interesting to note that Tecno went with Metiatek processors for the recent devices, most notably the Tecno Phantom F7.

What’s my take on this?

Tecno needs to leverage on this hype and innovate, make the offering able to compete with the others in the market. The smartphone doesn’t last long and that shopper of the Tecno smartphone will be back shopping in a few months. The average Chinese smartphone user changes phones every 23 months, this might not be much different from the African you serve.

These people are now in the know, their expectations will be different. Will you offer them what they got in the first purchase or did you just groom them for your competitors?