While opportunity for smartphone manufacturing in Africa does exit, the continent’s fragmented markets pose a challenge to these aspirations.
This is according to Angela Wamola, head of GSM Association (GSMA) Africa, who recently spoke to ITWeb on the sidelines of the GSMA Digital Africa Summit in Cape Town.
The GSMA Africa boss was speaking on the back of the industry body’s newly-released report, which delves into factors that hamper smartphone adoption in Africa, among other issues.
The report reveals that domestic production of smartphones presents the possibility of more affordable devices, but remains unviable in most African countries.
Asked if there is potential for domestic smartphone production to bridge the access gap in Africa, Wamola told ITWeb that the opportunity is there. However, such a move must be “soberly investigated, as not every country will have the volumes to drive production”.
“You need the power of one billion; for example, one billion in India as one marketplace,” she stated. “It [India] is one marketplace not 55 marketplaces like here in Africa. The challenge for Africa is that if each country tries to create their own plant, how much of those volumes will be able to guarantee that the plant will continue to run.
“If you can’t guarantee close to five million units a year, then the cost for the plant…is that it will be underutilised, not running 24/7 and runs maybe eight hours a day. These are some of the inefficiencies we have in Africa, leveraging around one marketplace.
“We could structure ourselves in terms of minimising the fragmentation, have a plant for Southern Africa perhaps, Northern and Central Africa. This will be Africa coming together around policies, the ability to have plants that feed the rest of the market because that’s the only way you can guarantee those volumes coming in, in terms of different segments. At a country level, those volumes are not sustainable – I think that’s the major challenge for us.”
Based on the report, a key action plan for the continent’s is to assess the long-term sustainability of local assembly before initiating domestic production programmes.
“There is a role for assembly plants in Africa in repackaging pre-loved and pre-owned devices and making sure they are checked before they get into the market. It also creates an economy of local assembly and employment for our people,” said Wamola.
Nations like South Africa and Rwanda have made attempts at local smartphone manufacturing.
In November 2018, the Mara Groupannounced it would manufacture Africa's truly full-scale smartphone, picking SA and Rwanda for the manufacturing plants for the Mara smartphone (Maraphone).
At the time, Mara Group founder and CEO Ashish Thakkar highlighted that while a few smartphones are assembled in Africa, nothing is truly being manufactured on the continent. As a result, he pledged R1.5 billion at the Africa Investment Forum, saying it would go towards establishing SA as a manufacturing hub of Africa’s “first high-tech, high-quality and affordable” smartphones.
A year later, the SA manufacturing facility opened at the Dube Trade Port Special Economic Zone in KwaZulu-Natal, promising to boost the local labour market.
Mara Group’s SA smartphone production plant was also viewed as sending a strong message of confidence in local manufacturing and the ‘buy local’ movement in the country.
Soon after the manufacturing plant opened, it signed deals with two of the big-four banks and giant retail outlet Pick n Pay, to make the locally-made smartphones available to their customers. In November 2020, the first Mara Experience Store was opened at Maponya Mall in Soweto.
In February 2022, it was revealed that the South African Mara Phones manufacturing facility would be sold on an offer basis.
Business Insider reported that the high-tech facility is “empty and on auction”, noting that such a sale was mandated by Standard Bank and the Industrial Development Corporation (IDC) – financiers of the smartphone factory. Standard Bank and the IDC provided around R100 million and R238 million, respectively, to fund the Mara Phones factory.
A few months later, a management buyout team of Mara Phones SA announced it had acquired the embattled smartphone manufacturer.
However, in February 2023, things fell apart when Mara Phones SA Projects, the company used to complete the management buyout of Mara Phones SA, informed employees and other stakeholders of looming retrenchments and its plans to implement Section 189 of the Labour Relations Act.
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