Retail chain offers SA free smartphones

2017-10-19 09:14 - Duncan Alfreds
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Consumers could get a free smartphone with a food hamper. (Supplied)

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Cape Town - South Africans are set to get free smartphones as part of a new business model that seeks to upend traditional smartphone distribution networks.

Retail chain Big Save is rolling out free smartphones in Gauteng as part of a drive to increase smartphone adoption in SA.

"The opportunity to drive smartphone adoption though our stores and partners has brought a new dynamic to our business," said Tony Ferreira, operations director for Big Save.

In order to get the phone, customers have to buy a grocery hamper from Big Save to the value of R850.

The hamper contains staples such as pap, spaghetti, macaroni and bread flour. The customer also receives a mid-range smartphone as part of the package.

Smartphone adoption

"The current active smartphones in SA of the total market is around 23%. That means that 77 % of the South African market could potentially participate in this opportunity," project leader Darryl Peel told Fin24.

"Our goals are to deliver at least 1 000 000 units for the 12-month period, and then grow that exponentially thereafter," he added.

The smartphones have a 5 inch ( 12.7cm) display, powered by a quad core processor, 1GB of RAM and 8GB of memory on board.

"In South Africa, smartphone adoption is very low, mostly due to the high costs associated with some brands, creating a significant barrier to entry for the general phone user.

"In fact, it's been reported that only 23% of all mobile phones in circulation in South Africa are smartphones, which begs the question: Are South African consumers too brand conscious, or are the smartphones currently being aimed at the lower (end of the market) just unappealing?

"In many respects, the latter talks to the issue at hand. To get into the smartphone market, you could pick up a base model 3.5 inch device, with sketchy performance at best, for anywhere between R400 to R700. And if user experience is key to adoption, then these are not going to drive any change," said Ferreira.

Cheaper smartphones

A man celebrates receiving his hamper. (Supplied)

While the phones are not intended to compete with the flagship devices from Apple or Samsung, Peel rejected suggestions that the devices are low quality handsets.

"There has been no argument so far. We have partnered with Azumi-Mobile, a South American company, to provide good quality mobile phones that are backed by a 12-month manufacturer warranty," said Peel.

Cheaper smartphones have proved to be the engine of growth for the devices, especially in the developing countries of sub-Saharan Africa.

International Data Corporation data showed that in 2015, phones priced between $100 and $200 saw a surge from 25% to 33% in market share, while handsets priced between $250 and $500 fell from 23% to 18%.

"This strategy of targeting the mid and low end of the market has contributed significantly to the success of vendors like Huawei and Lenovo," said Nabila Popal, IDC's research manager for handsets and display solutions in the Middle East and Africa.

In SA, the traditional mobile distribution model is linked to mobile operators but despite that, Ferreira made no secret of his ambition.

"The phones are rolled out in phases; our initial number was set on 85 000. We currently have started rolling this out in fewer numbers as we are busy negotiating with brands to participate with the hamper pack, but envisage a massive demand," he said.

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