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Where Africa and Technology Collide!

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Africa: Turning the World Upside Down

Whitespace in business is defined as a place, “…where rules are vague, authority is fuzzy, budgets are nonexistent, and strategy is unclear…” It’s the space between the organizational chart, where the real innovation happens. It’s also a great definition for what we see in Africa, and it’s the reason why it’s one of the most exciting places to be a technology entrepreneur today.

I just finished with a talk at PopTech on Saturday where I talked about “The Idea of Africa” and how Western abstractions of the continent are often mired in the past. It’s not just safaris and athletes, poverty and corruption – it’s more nuanced than that.

Today I’m in London for Nokia World 2011 and am speaking on a panel about “The next billion” and how it might/might not turn the world upside down. In my comments tomorrow, I’ll probably be echoing many of the same thoughts that came out over the weekend at PopTech.

Here are a few of the points that we might get into tomorrow:

Horizontal vs Vertical scaling

I talk a lot about this with my friend Ken Banks, where we look to scale our own products (Ushahidi and FrontlineSMS) in a less traditional format. As entrepreneurs you’re driven to scale, but our definition of scale in the West tends to be monolithic. Creating verticals that are incredibly efficient, but which decreases resilience.

In places like Africa, we have this idea of horizontal scaling, where the product or service is grown in smaller units, but spread over multiple populations and communities. Where a smaller size has its own benefits.

In this time of corporate and government cuts, where seemingly oversized companies are propped up in order to not fail, there are some lessons here for the West. We shouldn’t be surprised that the solutions to the West’s problems will increasingly come from places like Africa.

Instead of thinking of Africa as a place that needs to be more like the West, we’re now looking at Africa and realizing the West need to be more like Africa.

Reverse distribution

Will we increasingly see a new set of innovative ideas, products and services coming from places like Africa and spreading to the rest of the world? Why is Africa such a fertile ground for a different type of innovation, a more practical one – or is it?

Disruptive ideas happen at the edge.

Africa is on the edge. While the world talks at great length about the shifting of power from the West (US/Europe) to the East (India/China), Africa is overlooked. That works in our favor (sometimes).

A couple of the ideas and products that have started in Africa and been exported beyond the continent include; Mpesa, Ushahidi and Mxit.


Mpesa – the idea came from Vodafone, but product met it’s success in Kenya. Over $8 billion has been transferred through it’s peer-to-peer payment system. Vodafone has failed to make the brand go global, but the model itself is being dissected and mimicked the world over.


Ushahidi – we started small, from Kenya again, and driven by our Crowdmap platform now have over 20,000 deployments of our software around the world. It’s in 132 countries, and the biggest uses of it are in places like Japan, Russia, Mexico and the US.


Mxit – the famous mobile chat software from South Africa has 3x the number of Facebook users in that country, and has over 25 million users globally.

Like we see at Maker Faire Africa, these innovative solutions are based on needs locally, many of them due to budgetary constraints. Some of them due to cultural idiosyncrasies. Often times, people from the West can’t imagine, nor create, the solutions needed in emerging markets, they don’t have the context and the “mobile first” paradigm isn’t understood.

A good example of this is Okoa Jihazi, a way to get a small loan of credit for your mobile phone minutes when you’re out of cash to buy them, from the operator. They’ve built some safeguards in to protect against abuse, such as you have to have had the SIM for 6 months in order to get the service. It works though, because the company selling it (and many of the mobile operators do across Africa) understands the nuanced life of Africa.

We hold on to technology longer, experiment on it, abuse it even. SMS and USSD are great examples of this, while much of the Western world is jumping on the next big technology bandwagon, there are really crazy things coming out in emerging markets, like USSD internet, payment systems, ticketing and more.

Throughout the world, the basic foundation of any technology success is based on finding a problem, a need, and solving it. This is what we’re doing in Africa. We have different use cases and cultures, which means that there will be many solutions. Some will only be valuable for local needs and won’t scale beyond the country or region. Others will go global. Both solutions are “right”, it’s not a failure to have a product that profitably serves 100,000 people instead of 100 million.

Turning the world upside down has as much to do with accepting this idea of localized success as an acceptable answer as it does with explosive global growth and massive vertical scale.

The Two Big Trends

Trend #1: Adoption by Africans as consumers is increasing.
Trend #2: Technology costs are decreasing

Let’s get back to my talk for tomorrow at Nokia… 87% of sub-$100 phones sold by Nokia are sold in emerging markets. 34% of Africa’s population (313 million) are now considered middle class. The fastest growing economy in the world is Ghana, 5 of the top 10 are African countries (including Liberia, Ethiopia, Angola and Mozambique). Across the continent, the average GDP growth is expected to be at 5+% going forward.

At the same time, we’re seeing bandwidth increase, and bandwidth costs decrease. Mobile operators are the continents major ISPs, and they’re getting creative on their data plans. Handset costs are going down. Smart(er) phones are available for less than ever before. We even have one of the lease expensive Android phones in the world at $80 in Kenya, the IDEOS by Huawei.

Is it all bright and rosy? Not at all. You’re on the edge, you have to create new markets, not just new businesses. But in that challenge lies opportunity, for it’s from these hard, rough and disruptive spaces that great wealth is grown. If you’re an African entrepreneur, why would you want to be anywhere else?

Virtual City’s Mobile Distributor Solution Wins Nokia’s $1m

John Waibochi of Virtual City, from Kenya, won the Nokia $1,000,000 Growth Economy Venture Challenge here at Nokia World today. This is an investment of $1m in John’s business, so it comes with support and connections that only an organization of Nokia’s size can provide. The award was given out by Stephen Elop, Nokia’s new CEO, as the first action of his at Nokia – this sends a certain signal to all devs around the world.

I asked John to give a quick soundbite on what this solution is:

John Waibochi wins the Nokia $1m Challenge from WhiteAfrican on Vimeo.

Here’s more:

Virtual City Ltd, a home-grown Kenyan company, has developed a solution that aims at addressing systemic issues along the Supply Chain for distributors and retailers of Fast Moving Consumer Goods in emerging markets. The Mobile Distributor Solution is designed to contribute to improved efficiencies and value to all the stakeholders in the value chain and result in increased number of transactions, accurate records, improved Inventory management & reporting from the field and effective management decision making. The solution will also bring value to a large number of beneficiaries comprising of thousands of small and micro enterprises in the FMCG Market.

It’s a product that can be monetized due to high demand by both retailers and distributors in Kenya. This is a very solid company, with a solid proposal. Seeing the video (not available yet) of this working with one of Africa’s leading beverage company’s was impressive.

From a Nokia Challenge perspective, this provides a solution that will bring value to a large number of beneficiaries comprising thousands of small and micro enterprises in the Fast Moving Consumer Goods (FMCG) Market through the smart application of mobile business and cashless payment technologies.

The project will generate revenue for the partners Virtual City and Nokia, while increasing the income levels of the stakeholders in the supply chain by opening up increased product sales coupled with additional benefits of mobile payment capabilities, transaction fees revenue, loyalty programs benefits, etc all facilitated by inexpensive and affordable mobile phones.

The new found ability to transact via mobile phones and use cashless means to make payments for goods or services, has the potential of availing solutions that the over 6 million users of mobile payment solutions from the telecommunication players can access and utilize in their business dealings, the aim is to fully utilize the potential that a mobile phone has in adding value to the user.

Background on Nokia’s Growth Economy Venture Challenge

Launched at CES 2010 by Nokia CEO, Olli-Pekka Kallasvuo, Nokia’s Growth Economy Venture Challenge called on innovators from around the world to create a mobile product or service to improve the lives of people in developing nations and compete for the chance to win venture capital investment of $1 million.

Why is Nokia holding the Growth Economy Venture Challenge?

Nokia is a leader in enabling mobile technology to transform people’s lives for the better (through projects like Nokia Life Tools, etc.). Efforts like The Progress Project and the Nokia Growth Economy Venture Challenge endeavor to show the mobile community what is possible in order to focus the entrepreneurial spirit of innovators on accelerating transformation in these areas of the world. We see this Challenge as a win for Nokia, a win for the developer that is selected, and a win for their customers.

What are the criteria for selection of the finalists and eventual winner of the challenge?

  • The mobile product, application or service must undeniably enhance the standard of living or lifestyle of the target customer.
  • The target customer must be from a region of the world where the general daily per capita income is $5 USD or less.
  • The organization that receives the $1 million USD investment must have shown that it has the potential to be a vibrant and successful business that will be profitable for itself and its investors (as judged through normal venture investment vetting procedures).

Nokia World 2010

At the Nokia World event in London. Keep up with it using the #NokiaWorld hashtag on Twitter and on their Nokia Blog.

“At Nokia, “connecting people” is more than a feelgood tagline.” Niklas Savander, Executive Vice President Markets, Nokia.

He goes on to talk about the fact that they’re the largest manufacturer hitting the largest number of people worldwide. Just as everyone has a different need, they have to create phones that offer different features, compromising on the device due to the customer needs.

Smartphones

“People bought far more Nokia smartphones than Apple and Android combined.” On average, people buy 260,000 Nokia smartphones daily. Despite all of these new competitors, Symbian is still the largest with just over 40% of the smartphone market.

Symbian 3 has been rewritten to be faster, easier to use and more developer friendly. “A transition from legacy to leading edge.” They plan to ship 50 million of these new Symbian 3 smartphones. Over 100 operators and distributors will be offering the N8 globally.

Another dig at Apple: “Our phones work day in, day out, no matter how you hold them.”

Maps

Nokia has invested a lot in Ovi Maps, having bought Navteq a couple years ago, and going on from there. NIklas claims that they have further reach and impact than Google Maps. It’s more accurate, has dedicated (correct) pedestrian routes. You also don’t need to be connected to the internet to use it, without a constant mobile connection. If you do need it connected, you’ll find it much less data hungry than Google Maps.

Nokia’s Ovi Maps is available in 78 countries and 46 languages.

By 2013 over 800 million people will be using GPS enabled devices. Soon, everything on the internet will have a location. This is huge and will transcend the user experience as we know it today. “It’s a space we intend to own.”

The Nokia N8

Anssi Vanjoki, EVP, General Manager of Mobile Solutions comes on stage.

“People are buying more than hardware and software when they buy a smartphone, and Nokia is the company that built this market.”

“A few critics have looked at the Nokia N8 and said that it looks like the “same old Symbian”. That’s like dismissing the experience of a new car because it has the same dashboard. You have to drive it to know the difference.”

A broader distribution base than any other platform. He’s talking to developers.

The Nokia N8 is an important milestone, because it’s the first to take the new Symbian OS to the next level. It’s got new hardware, and new software – a new user experience. He wants us all to give it a test drive, they’ve got plenty of them around the event to play with.

He talks about the N8’s 12mp camera, and shows us some examples. They are amazing. It has a mechanical shutter, so the images look great. It has the largest sensor used in any phone-like device.

No other smartphone on the market can give you such a high-level experience. Anssi then shows us a trailer for Tron, with a direct cable (HDMI) onto the big screen from the phone itself. It is amazing.

A lightening fast processor and a 3d graphics accelerator. Aluminum body. Glass OLED Screen, etc.

More new phones

Different people have different needs. A new family of Symbian devices.

Introduces the Nokia C6. Has an 8mp camera, built in Ovi Maps, location sharing is made easy. It also features something new, the ClearBlack Display (CBD), a premium touch screen with a great view. “The black screen is blacker than black, as the sensors take away reflection on the glass.”

The Nokia C7 is thinner, with a stainless steel body.

Social network support for Facebook and Twitter are built into the new C6 and C7. Since Nokia’s customers are global, they’re also supporting Renren in China, Orkut in Brazil – and other global mobile social networks. Both will start shipping in Q4 2010.

They’re looking to find the “most active Facebooker” among their 1.1m Facebook Fans. They’ll choose 5, and they’ll win a new Nokia C6 and C7 and 20 of their closest friends.

“The Nokia E7 is BIG.”, it takes over the space that the Nokia 9000 started in 1996. It’s an office on the go, supporting Microsoft’s suite of business software.

[Note: trying to find an image of the Nokia e7 to share with you, but their site gives me no responses for a search… crap. Bad marketing.]

Found one on Engadget:

Environmentally friendly: C7 uses biopaints, C6 uses recycled metal.

Nokia Developer Community

Purnima Kochikar, VP Forum Nokia and Developer Communities

1.3 billion Nokia people. She crisscrossed the world to talk to developers (she didn’t go to Africa though).

2+ million developers globally.

Simplified developer interaction and made it easier to distribute applications. “You have an improved ability to write apps that mean the most to 1.3 billion Nokia users that use payment methods that serve them best.”

We believe that success isn’t measure just in Dollars, Euros or Pounds, but also in the lives of people. We see this impact everyday in the apps that you have built. Our goal is to help increase the health, wealth and lives of our users, and bring them joy. Uses the example of Proxil for checking if drugs are legitimate.

Think globally and act locally. This isn’t a race to the next million apps. It’s about getting relevant apps to everyone around the world.

Have created a way to reach consumers via demographics, not just geographic location. For instance, have found a great desire of Indian apps in Canada.

Last year alone Nokia shipped 364 million phones with Java (s40) on them. There is a real hunger for great apps on these devices, and people are absolutely willing to pay for them.

Ex: VuClip allows you to watch videos on your mobile phone. The founder thought it would sell best on smartphones in the West. He was pleasantly surprised to find that most of his users come from the emerging markets.

“Touch and Type” SDK for s40 is available on ForumNokia.com.

The Ovi Store

175 million devices available to be sold to.
45 million touch devices
50 million potential new users with the new Symbian 3 OS phones. (C6, C7, E7, N8 models)

There are 2 simple ways to build for Nokia: native Qt SDK and the Symbian Web Runtime (web SDK).

The new standard compliant Nokia Browser. It has been updated for touch, improving consumer interaction, especially for people who will use the mobile as their primary internet device.

Available in 190 countries
Supports 120+ Nokia devices
Credit card and operator billing (choose operator billing 2/3 times… that’s huge.)

Fizwoz as an example has 167 country reach due to the Ovi Store.

App distribution cost reduced on Ovi Store – application signing is free for Java and Symbian.

They have 150 people in Forum Nokia to support developers, with someone on every continent, including someone in South Africa (do they help the rest of Africa or only South Africa?).

Mikael Hed, CEO of Rovio, leader in mobile games. Creator of “Angry Birds” (which I and my daughters love) and has sold over 7 million copies and the free version has been downloaded 11 million times. A new bird, the “Mighty Eagle”, is released to let you not get frustrated with a level – an in-app purchase for $1.99. (awesome new video)

The Ovi Store’s in-app purchase option let’s them maintain the immersive gameplay experience.

Vodafone

Vittorio Colao, Chief Executive Vodafone Group, comes on stage. “I personally believe that data is a great opportunity.”

Vittorio talks about his recent holiday in Greece, and how they interact with their mobile devices now as compared to years ago. They’re emailing, hiring cars, booking restaurants, mapping beaches, reading news on tablets, watching video news, getting wind forecasts by the hour, etc… They’re using data seamlessly.

Life is changing in an incredible way amongst the masses. Real life.

Here’s just 1 month from Vodafone Group usage of data:

  • 1/3 browse
  • 25% play games
  • 20% Email
  • 15% social networking
  • 11% maps
  • 30% business
  • Video and music fastest growing.

All people, rich or poor, north to south, will have their interactions done on the mobile. We need 5 things now to make things work better:

1. Network speeds and quality of service – the expectation, in terms of quality, is quickly rising. Pervasiveness, speed, accessibility, distribution and care. Vodafone has never cut investment in this area. The operator can provide two things: privacy and security. Data pricing and data caps have to change, he wants different levels of service.

2. Devices and operating systems – low-end smartphones, PCs, emerging market smartphones.

3. Content and services – Thinks social networking will double. Navigation will increase by 90%. Streaming music and video are already the largest of Vodafone Groups work.

“In reality, the network’s main job is not voice anymore, it’s handling our customer’s entertainment.”

A couple recommendations for devs: 1) tailor your apps to individual users – they have loads of customer information that can be tapped as an operator. 2) Operator billing is quick, intuitive and much easier to manage and will grow your usage of paid apps.

4. Customers affordability – pricing is becoming more important than features in the new segment of adopters of smartphones (emerging markets).

5. Ecosystem profitability – There has to be the right return for all the players. Pricing should be adjusted to reflect usage and load on the system. We’re reaching the end of the “free” time, otherwise we’ll have a free bad experience. Segmentation must drive the right device to the right demographics at the right time. There must be enough margin for developers to have a strong incentive to create locally relevant experiences for customers.

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