Mobile Apps in Africa (2011 Report)

I maintain that Russell Southwood and his Balancing Act newsletter and reports are some of the best material on pan-African technology and broadcast information that you can find anywhere. Their recent “Mobile apps for Africa: Strategies to make sense of free and paid apps” report is one of them, and here are some interesting tidbits from it.

The report is broken into three parts: device, developers and distribution.

Device

South Africa, Egypt, Nigeria, Morocco, Ghana, Kenya and Tanzania all are good markets for apps, due to their population, 3g pickup and smartphone penetration. It should be noted that the highest smartphone penetration is in South Africa at 10%, though the high-potential countries are expected to grow by 8-10% per year over the next 3-5 years.

“Interestingly, infotainment activities score high off-line (using the phone’s features) and online (mobile Internet).”

Balancing Act provides a very interesting visual of what the “Handset pyramid shift” looks like in Africa.

Africa's handset pyramid, and its shift

Developers

The development of smartphone applications in particular commercial apps will depend on the rate and level of smartphone adoption. Developers in countries like South Africa, Kenya or Egypt with encouraging smartphone penetration rates have more opportunities in terms of apps development and uptake by potential users.

The major international apps stores (Apple, Android, etc) have set a figure of 70% of the revenue generated by apps will be going to the developer. This is very good news for African developers because so far with SMS based content, the revenue sharing model is not in favour of developers since less than 30% of the revenue generated by the content is going to the author. It is African mobile operators that make the most out of them as they take a minimum of 50% of the revenue generated by SMS services. The major international apps stores also offer additional revenue to developers via advertising and in-apps purchases. These revenue streams are becoming more and more significant for developers.

Building into the next section on distribution is the issue that developers have with creating apps for the international app stores. It’s very difficult, and often impossible, to sell apps on them and for African customers to buy them.

Distribution

The major consequence of the “success story” of the apps store is that it
establishes a distribution model for mobile content that breaks away from the monopoly and exclusivity that mobile operators have enjoyed so far on the delivery of services to their mobile subscribers. Today the mobile apps distribution ecosystem can roughly be divided in 4 main groups:

  1. Operating system app stores
  2. Handset manufacturer’s app stores
  3. Mobile operators’ app stores
  4. Independent app stores

So far, most African mobile operators have been little affected because smartphone penetration rates are very low in most African countries and also because African smartphone users still have access issues to the full portfolio of international apps stores.

The report goes on to express Balancing Act’s thoughts on how mobile operators can get into and take advantage of mobile app stores, “While revenue potentials are promising what else do mobile operators have to consider if they want to roll out their own apps store?” The report establishes the following 8 recommendations:

  1. Be OS agnostic
  2. Know the devices on your network
  3. Use “white label” apps store
  4. Source international content from third party content providers
  5. Don’t forget about additional revenue streams
  6. Build a strong local flavour to your apps store
  7. Make apps affordable to your subscribers
  8. Use carrier billing

And there’s More

Unfortunately, I can’t put all of the good stuff in this blog post. There are a lot more interesting points in the report, and you can buy it here. Amongst some of the best are:

  • What smartphones do South Africans want?
  • Nigerians love their BlackBerry
  • Examples of mobile apps start-ups companies in Africa
  • Morocco: Mobile internet users and penetration rate
  • Mobile Internet subscribers and market share per operator
  • Advertising and in-apps purchases potential income for developers

Africa’s Android Invasion

Mobile phone manufacturers, operators and of course Google started a big push on Android into Africa this year. Samsung, HTC and Huawei are moving Android phones into the market. Some operators are seeing the signals and starting to subsidize Android handsets to get them to a price point that is palatable by a larger number of buyers. Google continues to push for local content, works with developers, does g-[country] events and puts on contests.

While the primary phones in Africa are still feature phones, Android has made a beachhead on the continent and will continue to roll forward. I believe we’ll look back at the landing of the IDEOS phone earlier this year in Kenya as an inflection point, where in 2 years we’ll define the times up until then as, “before Android”.

Developers as Leading Indicators

I see what the local programmers working on as a leading indicator of what everyone else will be using in the next 2-3 years. In the iHub, on the mobile side, we see a lot of programmers excited about, and working on, Android apps. It’s a balance between that and the SMS/USSD core infrastructure apps that Kenya is well known for.

Today, at the g-Kenya event, Google announced the three winners of their Android Developer Challenge for Sub-Saharan Africa. Each of the winners will receive $25,000.

There were 29 finalists came from the following 10 countries, which is a pretty decent spread. However, you can tell from the number of apps in each country where the real powerhouses are.

7 South Africa
6 Kenya
5 Nigeria
3 Ghana
2 Uganda
2 Malawi
1 Senegal
1 Togo
1 Tanzania
1 Republic of Guinea

The one pain point that developers have right now is that they feel pressure to support multiple operating systems. This is Primarily between Android and Symbian if the app is focused on Africa, if the app is global, then add in iOS and possibly Windows and Blackberry.

It will be interesting to see what happens with feature rich HTML5 and how it plays out into the mobile space. At this point, either we’ll see a lot of mobile web apps (working across PCs and all phones with real browsers) or we’ll see a lot of apps. Even if we do see the client-side Android apps, I’m guessing they’ll be more thin-clients than anything else. Only time will tell though.

The Future of Consumer Mobiles in Africa

The years ahead are hard to predict. However, in Africa I think we’ll see an increase in Android handsets and mobile web usage, and a continued decrease in the cost of low-end smartphones and data connectivity.

If I’m an operator, I see the writing on the wall in regards to SMS and USSD apps, and I’m trying to move my user base to data. This means more subsidized phones, and attractive data packages that are wide-spread across my region. I’m making deals with content providers and offering zero-rated (or reverse-billing) packages on data to large content houses in order to increase usage.

If I’m a manufacturer, I’m providing an array of Android handsets that allow my aspirational users to move up from a feature phone to a (we hope soon) $50 Android, then up to a tablet eventually. I’m doing whatever it takes to decrease costs on the low-end to get mindshare. If I don’t do Android (Nokia, RIM) then I’m doubling down on the mobile web and pushing for better browsers on my phones.

If I’m Google, I keep having dev events and competitions, but I also push for better localized payment options for developers in Africa. On top of that, I’m looking for an operator billing link for consumers with attractive percentages for app publishers, that way I attract them and everyone makes more money.

Of course, there’s more, but that’s where I’d start.

Tech Success in Africa is Built on the Ordinary

It’s not a big surprise to see Nokia’s Symbian operating system is the most popular in Africa. We all knew that, but it’s by how much that draws your attention.

Royal Pingdom has an excellent post on the web usage (which is what they can measure) of the top OS use around the world. It’s amazing to see the difference between Africa, Asia and South America as opposed to Europe and North America.

While, as a developer, it’s a lot more sexy to work on the cutting edge operating systems like iOS and Android you’d be making a mistake to do that in Africa. Unless you’re developing apps that are global in scale or you’re doing client work, you should be focusing on Symbian (or Samsung’s Bada OS in some countries). It’s where the numbers are.

Reaching Ordinary Africans

This brings to mind something I’ve been thinking about for a while. Mxit, as most people know now, is the mobile social network out of South Africa. It was built about 4 years ago and has 20 million+ users.

Mxit didn’t get big because they tried to build something that was cool and sexy for the middle/upper classes in South Africa (which is what so many try to do there). Instead, they built one of Africa’s most successful tech companies by focusing on everyday South African youth and fulfilling their needs.

In fact, you can take this one step further. Almost any meaningful success in Africa’s mobile or web space has been from companies focused on meeting the needs of ordinary people. Go ahead, think of the success stories in Africa’s tech space, now name them and see if they’re made for a global market, Africa’s elite, or for the masses.

Nokia World in a Time of Flux

I’m at Nokia World this week in London as part of the final judging panel for the $1m Growth Economy Venture Challenge. I’ve been reading and reviewing dozens of entries from all over the world, and I’m excited to see the finalists in action as they do their presentations tomorrow.

Nokia in Flux

There are a lot of things going on within the world of Nokia right now. The Monday Note has a great overview of the big challenges facing Nokia right now, not least their incoming Canadian CEO, Stephen Elop, and the effect that it is having internally on other high level executives.

A couple months ago I gave a talk on “Innovating Africa“to some of the Nokia executives in Nairobi, they largely dealt with Africa, as well as specific products and operating systems. Most of my suggestions were directly from passionate customers of theirs from all over Africa. The Nokia brand is still very strong in Africa, the game is still on here. However, Nokia needs to be careful that they don’t lose this advantage by faster moving, cheap Chinese manufacturers and the better software and UI found on the Android/iPhone smartphones.

Developers, Money and Nokia in Africa

Smartphone growth and marketshare is getting more and more aligned with the types of apps that are available for people to use. If the apps, utilities and games that they want aren’t present, then they’re more likely to move somewhere else. In Africa, where unlimited, high-speed bandwidth isn’t the norm, the mobile web as an option isn’t quite reality yet. It’s a different paradigm than in the West.

This means that you need third-party developers interested in building apps on your operating system. While almost all operating systems have a store for apps now, including Ovi, iPhone, Android, Bada and others, there is a glaring hole in Africa:

You can’t get paid…

So, here’s a hint for Nokia, taken from the talk months ago: make it easy for developers to make money, even in Africa. Figure out a way that people get paid and can bill via your server-side offerings like Ovi.

Smartphones

Africans are aspirational; they might not be able to afford the Mercedes Benz, but everyone is working their way towards buying one. The same holds true for smartphones, though the vast majority cannot afford a high-powered iPhone, the latest $600 Android phone or the Nokia N8, they look to who the leader is in the space. He who controls the mindshare of the smartphone space, holds the mindshare of the mobile brand as a whole.

Nokia N8

I’m looking forward to testing out, I’m sure it will have excellent hardware as all Nokia devices tend to be well engineered. However, I’ve yet to find a Nokia with good software or UI, and since it’s running the brand new Symbian 3 OS, it will likely be laden with bugs as all first-time OS are prone to have. (Engadget and CNet reviews)

$100 IDEOS Android Phone Launches in Kenya

Google and Huawei have launched a very competitively priced Android smartphone in Kenya today, called the IDEOS. It is being sold for 8,000 Ksh (~$100).

It runs Android 2.2 (Froyo) and have access to the Android Market. The IDEOS is a touch-screen phone that comes with bluetooth connectivity, GPS, a 3.2-megapixel camera, up to 16GB of storage and can be transformed into a 3G Wi-Fi hotspot connecting up to eight devices.

2 out of every 3 internet users in Kenya connect through their mobile phone. This is why data is the current battleground in the mobile operator and handset space. Though there are only 6 million internet users in Kenya, the data market though the mobile is huge. Currently, there are 20 million mobile phone subscribers of a total 38 million possible.

Data enabled phones of any type cost a minimum of $40-50 in Kenya, a touchscreen smartphone coming in at $100 is going to be a big deal for a lot of people.

gKenya

Google Kenya started their gKenya conference today. They are meeting with software developers, entrepreneurs and CS students at Strathmore University over 3 days to discuss innovation and growing businesses, as well as discussing their own suite of products.

[An update, after discussions with a bunch of Google employees at the iHub yesterday. The Google team said they didn not know when the phone would be able to be bought in Kenya.]

Android and pre-paid phones

There are two very big issues that the Android team will need to take care of before we see Android being used heavily in Africa.

First, the lack of access to SIM applications is surprising. These are the apps like Mpesa, top-up services and such. These aren’t just “nice to have” features, these are critical and the phone will fail if it doesn’t have them enabled. Your most basic phones can do this, but smartphones running Android cannot? (Note: unless you root your phone)

Second, there are a lot of background services running on an Android phone that use data. That’s fine for people living in an all-you-can-eat world of bandwidth, but here where we have to pay by the megabyte, it doesn’t work. I remember one day when my phone used up 1000 Ksh of credit ($12), that’s unacceptable and will drive users away very quickly.

Geeking out on a Motorcycle Trip

Today I had a lot of fun, one of my old schoolmates (Markus) from here in Kenya asked me if I wanted to get out of Nairobi and hit the trails on our motorcycles. Of course, the answer was yes. We headed out towards Naivasha early this morning and then took a side road off towards the escarpment.

The roads are dirt and with the recent rains they’re really quite rugged and beyond most normal vehicles. Markus is an experienced trail rider on a KTM 450 (kitted out), I’ve ridden a lot of trails, but years ago and not nearly as experienced as Markus – and I’m riding an offroad/onroad Suzuki DR 650 (stock).

We ended up having to run through, and beside, a lot of 5-10 acre farms that sit at the base of the escarpment in order to find a road up to the top of the escarpment. A lot of this was on cow paths and required some fine-tuned leveraging of our bikes through gates and streams. The road to the top of the escarpment, when found was a fun ride, minus the part where I wiped out on a simple turn (the one below)…

Bruises (and bruised ego) aside, we kept going up into small-farm, where quite a few more people live, and which is almost entirely denuded of trees that were there just 15 years ago.

After talking to some of the local community, we were advised to head down a certain road, with assurances that it would lead us to the bottom of the escarpment. It did, eventually, but not until we had backtracked, sidetracked, followed animal trails (in buffalo country), and then realized that the washed out gully we were in was supposed to be the road.

3.5 hours of wrestling a mammoth 650cc bike through this terrain left me exhausted. This type of bike is not made for that level of technical riding down boulder strewn gully’s and game trails. However, it was also hugely rewarding when we finally found our way to the bottom of the escarpment and much easier riding.

Mapping the Malewa Motorcycle Trip

I also brought my Android Nexus One along for the ride, hoping that the battery life would allow me to use it for tracking our trip. The Nexus One has a GPS, and there’s an Android app called My Tracks, that tracks your trip, allows you to add waypoints, then easily shares it to Google’s MyMaps.

Here is the result:


View Malewa Motorcycle Trip in a larger map

It doesn’t look very exciting like that, but it does give you the exact data for having your own challenging ride if you’re in Kenya.

On the Road to Kenya (and links)

I’ll be offline for the next couple days as I hit the road for Nairobi. I’m arriving just in time for the Safari Sevens rugby tournament starting Friday, and will be in Nairobi until the end of the month. If anyone wants to get together, shoot me an email.

I thought I’d leave everyone with some links to stories that I’ve enjoyed over the last week.

  • Mobiles in Africa – one of the best articles I’ve read in a long time on the mobile phone in Africa, by Ken Banks.
  • Few people can write long interesting articles, but some have the skill to do it. Ethan Zuckerman writes another thought provoking post on the architecture of Serendipity.
  • Find a job in Kenya using SMS on Kazi560:
  • myKRO – A new blog about the world of microfinance. They’re looking for contributors, especially from the field in Africa.
  • A nice article on how to get the most out of your thumbdrive from Freelance Switch.
  • 50 Questions asked and answered about Android on ZDnet.
  • Through Mobimii, MXit users are no longer bound to the MXit service. Breaking news by Charl Norman for Mxit users in South Africa.

More in a day or two, once I land…