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TCL to entice SA market with ‘price-sensitive’ smartphones

Simnikiwe Mzekandaba
By Simnikiwe Mzekandaba, IT in government editor
Johannesburg, 26 Jan 2024
TCL plans to bring its next suite of smartphone products to the SA market this year.
TCL plans to bring its next suite of smartphone products to the SA market this year.

Despite setting its sights on grabbing a sizeable chunk of South Africa’s smartphone market share, TCL Communications admits this has been a mountainous undertaking.

Smartphone subscriptions in SA reached 73 million in 2022, according to ICASA’s March 2023 report on the state of the ICT sector in SA.

Based on the research, smartphone subscriptions are at 70% of mobile cellular in the country, with brands like Samsung, Apple, Huawei, Oppo, Xiaomi, Vivo, Honor and Tecno, to name a few, all owning their share of the market.

Ernst Wittman, TCL Communications regional manager for Southern and East Africa and global operator account manager, yesterday briefed media on the firm’s forward-looking strategy, as it aims to expand its smartphone and tablet portfolio for the South African market.

According to Wittman, TCL has made strong gains in markets like the US, where it debuted in 2019. TCL smartphone products are also available in Australia, Canada, Western Europe and Latin America.

On the African continent, TCL holds sixth position in the smartphone segment and fifth position in the tablet segment, it says.

However, the South African market has been a little harder to crack for the Chinese smartphone brand.

Wittman said a decision was made to launch TCL across key markets, continuing in North America, while bringing it to Europe and certain countries in Africa, with SA being one of them. “That launch was in March 2020 and then the world came to a standstill – we fell short when it came to that.

“We all know some of our competitors’ brand names are a lot stronger, and it’s a big mission for us to play in the same field as they do, but affordability remains our key component.”

Breaking away

Prior to establishing itself as a standalone brand, TCL sold and marketed devices under the Alcatel brand, also selling white-label products under the brands of network operator partners, explained Wittman.

Alcatel Mobile Phones was established on 24 April 2004 as a joint venture between Alcatel-Lucent (45%) and TCL (55%). Alcatel originally started making mobile phones in late 1996.

In 2005, the joint venture was dissolved and TCL acquired Alcatel-Lucent’s 45% share, and Alcatel Mobile Phones became a wholly-owned subsidiary group of TCL. The brand name was then licensed to TCL.

Wittman revealed the naming rights agreement with Alcatel concludes at the end of 2024, noting this will result in a full evolution as the company moves away from Alcatel to solely TCL.

Ernst Wittman, TCL Communications regional manager for Southern and East Africa.
Ernst Wittman, TCL Communications regional manager for Southern and East Africa.

TCL’s product offering includes TVs, home appliances, air-conditioners, mobile phones, notebooks, tablets, smart glasses and solar panels.

In SA, its portfolio comprises the 2G Alcatel 2020, 3G Alcatel 1T TAB, customer premises equipment (CPE) − such as WiFi routers (including MiFi routers) − as well as the Vodacom Kicka 6 powered by TCL.

At the end of 2022, TCL launched TVs in SA. This is a business division where a lot more activity can be done, noted Wittman.

Since TCL was still relatively unknown in SA, it was easier to add a TCL CPE product in the market versus the mobile side, which was inundated and diluted with smartphone products, he explained.

As a result, the company focused on the Vodacom Kicka 6 − a 4G-powered, 6-inch, co-branded and mass-market product, retailing for R999.

The association with a brand like Vodacom was the strategy adopted for the mobile phone side of TCL.

“Bringing a new brand into the market, you can pour millions into it from a marketing perspective, but as to whether you’ll see that return on investment immediately, the answer is probably not.

“At the end of 2022, my strategy for our market specifically was to keep our focus on MiFi, CPE and the tablet side of the business. As a smartphone business, the focus now is to bring smartphones to the market.”

Wittman said the Kicka journey began in SA in 2014, and was a “great success” in multiple African nations, including Mozambique, DRC, Lesotho and Tanzania. The device advanced over the years, and three million products were sold between 2014 and 2019.

It was relaunched in May 2023 as the Vodacom Kicka 6, powered by TCL, he said.

“Sales to date…we’ve done just under 150 000 units. I wanted this number to be a bit higher − to be at 200 000 − but we have quite a bit of competition from our tier three vendors.”

What’s next?

To take on its competitors, TCL plans to focus on key products, according to Wittman, and products from 2023 will continue to be in the market.

First on its slate of products for 2024 is the TCL 505 − a 4G, 6.7-inch smartphone. It has 4GB + 4GB RAM and 64GB ROM, and will sell at the recommended retail price of R1 999.

“From a pricing strategy, we are aware that we are a brand-new brand, so to bring in a product segment that is a R10 000 or R15 000 phone is not realistic. We are focusing on the mass-market product segment, which is below the R2 000 price mark.”

The TCL 501 − a 4G, 6-inch, 2GB RAM and 32GB ROM smartphone for R999 – is also planned.

It will also introduce the TCL 40 NXTPAPER smartphone, featuring NXTPAPER display technology, which mirrors the display of a Kindle.

The 6.7-inch smartphone features a 50MP camera, 8GB + 8GB RAM and 256GB ROM, and will be sold on contract at first and later at a prepaid recommended retail price of R3 999, revealed Wittman.

TCL is targeting SA, Kenya and Rwanda for its TCL 40 NXTPAPER smartphone. It will be available in stores from May, while the TCL 505 and 501 will be launched locally in April.

“We’re looking at a half-year projection of 15 000 TCL 40 NXTPAPER units sold,” Wittman concluded.