The battle for mobile will be won and lost at the low end

The battle for mobile will be won and lost at the bottom of the pyramid. I can end this article right here, and it will suffice. However, that would be no fun. The fun is in making comparisons and taking jabs at contrary views, so we can all have a rumble. Let me use one of the most extreme cases to buttress my point.

bottom of the pyramid

Some have pointed at Apple’s success at the high end of the mobile game and used that to argue that it is the profits that count, and not the sales numbers. It sounds all good and dandy, but note how even the almighty Apple has begun to adjust to the realities on ground. They have to or else they will lose both sales and numbers. Already, we have the iPad Mini and we now have news of an iPhone Mini. I an almost bet that Apple will never do a proper low-end phone. It isn’t their style. Still, they are smart in adjusting, even if slightly, to what must be glaring for all but the most jaundiced to see – the rich, ripe and wide bottom of the pyramid. Yes; Apple is only skirting the extreme top of that bottom. Still… Because of its business model, Apple will remain a niche player in terms of market share, but of course will smile to the bank. No issues.

Real Revolutions Happen At the bottom of the pyramid

In economics, the bottom of the pyramid (BoP) is the largest, but poorest socio-economic group. Anyone with an understanding of human history will tell you that real revolutions happen at the bottom of the pyramid. Apple may have brought about a radical shift in mobile user experience, but it is the manufacturers (or manufacturers) that deliver similar experiences to the BoP that will be hailed as the hero(es) and deliverer/s of the people.

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We had mobile phones in Nigeria twelve years ago, but they were beyond the reach of the average person. Remember those mobiles you had to pay N80,000 a piece to purchase? Yes; those. The revolution started when prices dropped within the reach of people at the BoP with the advent of GSM technology.

Look at how TECNO is taking the Nigerian smartphone market by storm. They meet the needs at the BoP. The average Nigerian speaks so glowingly of TECNO that one would think mobile phones didn’t exist before that brand showed up. Anyone remember how Sagem used to be so hailed? If only their reincarnation in the form of Infinix can repeat the feat.

Nokia has been a household brand in the Nigerian mobile market. Till today, someone like my dad and mom will not purchase a mobile phone if it does not have the Nokia logo on it. Nokia’s adventure into Windows Phone may have taken off slowly, but see what has happened with the budget but capable Lumia 520. Released just a handful of months ago, it is outselling every other Lumia device and leaving them in the dust. It is today indisputably the most popular Windows Phone smartphone in the market. The bottom of the pyramid effect again.

Even further below the budget Lumia is the new Asha series. I have had one with me for a couple of days, and it is a truly amazing device at a much lower price point than the Lumia 520.

Looking To Invest In Emerging Markets?

Brands can do well in the market by focusing elsewhere, no doubt, and many play that game well. However, the revolution is at the bottom. This is even more pertinent in emerging markets where this revolution is happening as we speak. Are you looking at investing in the mobile market in Nigeria or Africa in general? Or in South America and Asia? Explore the bottom of the pyramid, because that is where all the action is. Forget the prejudices; there is a lot of money to be made there.

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The battle for mobile will be won and lost at the bottom of the pyramid.

Image Source: London Business School

Mister Mobility

I started blogging about mobile in 2004 as a fun way to share my passion for gadgets and mobile services. My other interests include digital media, speaking and teaching, photography, travelling, and dancing.

0 thoughts on “The battle for mobile will be won and lost at the low end

  • July 19, 2013 at 8:01 pm
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    Succinctly put, you have spoken my thoughts and beliefs. Welldone Sir!

  • July 19, 2013 at 8:11 pm
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    I don’t agree with you completely on this. Yes, the low end is a determinant in establishing market share and it also serve as a means of brand introduction, the battle will not be won on this turf.
    I’ve come across several industry reports which pointed out the profit margins from low end devices is minimal so low that other logistics associated with manufacturing and distribution takes up much of the profits. I know someone may point out that scales of numbers will address this, however, the material handling costs also increases.
    Yes, it was also pointed out that Nokia sells more Lumias than BlackBerry sells phones, I’m sure most of these Lumias are 520’s that’s why Nokia is bleeding red.
    Let’s not be deceived, we all know Apple won’t make low budget phones, it will rather be the bottom of high end phones…I’ll call them budget iPhones. Apple’s model of low end phones are actually older versions of iPhones, so technically, they aren’t low end phones.
    Most of Samsung numbers comes from its high end phones especially the Galaxy and Note series. Yes Sammy still makes low end phones but these are just meant to serve as an introduction to brand rather than making actual profits.

    That being said, I think the battle will be won on ECOSYSTEM. That’s why android has not obliterated iOS up till now. From the looks of it, Apple has the most robust ecosystem. Google also has a strong ecosysyem but its marketing model is mainly still focused on advertising. Its a good thing that google has started giving motorola a revamp, by focusing on hardware, google aims to make its ecosystem as robust or even better than Apple. Even Samsung is building up its ecosystem that’s why it is replacing some core android functionalities with its home grown version.

  • July 20, 2013 at 1:11 am
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    Wp8 is new to the market so introducing low budget phones is certainly the right call. If people find using lumia 520 or any low range wp8 satisfactory, there’ll be incentive for them to try out the high range ones such as 920. Profit will definitely be on the low for the short run period but in the long run when the platform has gained general acceptance, wp8 can start introducing high budget phones in mass qty with the belief that people will buy. But as at now, Nokias best shot is to keep flooding the market with devices such as these. At least there’s more lumia sold this quarter than previous and let’s hope the trend continues upwardly

  • July 20, 2013 at 11:53 am
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    Prediction gives birth with time. We see it happen again and again!

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