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SA offers tech giants fertile ground

Bonnie Tubbs
By Bonnie Tubbs, ITWeb telecoms editor.
Johannesburg, 13 Apr 2015
SA is an attractive growth market for tech companies and a good springboard for companies looking to build sales in sub-Saharan Africa.
SA is an attractive growth market for tech companies and a good springboard for companies looking to build sales in sub-Saharan Africa.

Despite the country's struggling economy, SA has become - and is likely to remain - a strong growth market for technology, with the consumer realm recently gaining momentum.

Corroborating this local industry expert stance are the list of tech giants that have taken the decision to increase local presence recently, such as Amazon, Facebook and Apple.

The latter introduced feet on local soil to liaise directly with the company's distributor channels - the Core Group and SA's mobile operators - shortly after the launch of its latest iPhones. This comes after over a decade of having only an indirect relationship with its local channels.

According to LinkedIn, Nicolas Rochas - who has been with Apple in various roles since January 2004 - was appointed Apple country manager in SA in September last year. Former sales head at Huawei SA, Michael Marcus, came on board two months later as "head of telecoms at Apple" in SA.

Last year also saw HTC take a more direct approach in-country - also after a period of absence - while gaming-famed Asus has big plans to establish itself as a leading consumer hardware brand in SA this year, and going forward.

On the enterprise side, California-based wireless systems provider Ruckus Wireless this morning announced it is expanding its presence in SA with a new office to accommodate a growing staff contingent. The move will also allow it to offer centralised operational management and sales support of partners and customers in the sub-Saharan region.

ICT expert Adrian Schofield points out that, apart from SA being an attractive growth market for tech companies in itself, it is also a good springboard for companies looking to build sales in sub-Saharan Africa.

Upward

World Wide Worx MD Arthur Goldstuck expects SA will see a greater presence by consumer-facing companies in the country, as their categories take off on local ground.

Apple and Facebook are already good examples of this, while Lenovo is one to be watched. Once the company decides how it is going to execute its Motorola strategy in SA, Lenovo is likely to become much more of a contender on the mobile front, says Goldstuck.

Africa Analysis telecoms analyst Ofentse Mopedi says SA is likely to see even more international activity if the country is able to effectively deal with the current power crisis it faces.

"There is definitely room for more global companies to enter the SA market and stimulate competition through innovative, better priced products and services compared to current ICT solutions available in the market."

Schofield points out SA has "reasonably good infrastructure and air transport connections". Specifically in the consumer market, Schofield says international tech giants are also likely to see the burgeoning sales of Chinese brands as motivation for a more direct approach in SA.

Apple interest

When it comes to Apple - the darling of many international markets, but still holding a relatively small market share in SA - BMI-TechKnowledge director Brian Neilson says the company's now direct presence relates largely to managing the relationship with mobile operators for the iPhone.

Goldstuck notes, although Apple's iPhone has a market share of only 2% in SA, local demand for the device is growing. "The company has seen massive sales in SA and the iPhone is now taking off here."

The success of the iPad is also a strong point for Apple, which recognises the market significance, he says. "We have also seen strong take-up in Apple laptops, particularly the MacBook Air. The Core Group has done a good job of creating price parity for one - but also awareness and desirability around the MacBook Air is growing."

Neilson notes Samsung has "outgunned" Apple in terms of marketing in SA to date, "so it could be that Apple wants to rebalance that presence to give iPhone 6 a better chance of gaining market share against the Galaxy S6".

Mopedi says, while Apple has so far managed to serve the South African market without an actual physical presence, the move to open an office in the country "underscores its plan to be more hands-on [here] and to increase focus on high-end customers".

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