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Mobicel is changing the mobile game

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It’s a South African brand that is little known in higher income segments, but Mobicel is about to break out of the entry-level mould, writes ARTHUR GOLDSTUCK.

South Africa has a long history of unknown mobile brands that start off catering for entry-level phone users, briefly threaten to challenge the big names, and then fizzle out like a fading signal from a derelict cellular mast.

Barely a year ago, for example, AG Mobile was the big story in local branding. It had sold millions of feature phones and low-cost smartphones, through mass-market retail chains like Jet and Pep. It was designed locally, manufactured in China, imported, and packaged for local tastes. It was a decade-long success story.

But then it overreached, produced a series of phones aimed at both low and middle-income segments, all the way up to mid-range smartphones. Not only that, but it flooded the market with handsets in the hope of replicating its success at the low end.

Overnight, the business collapsed as sales failed to keep up with the heady pace of imports. In a matter of days, the brand vanished from the shelves.

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Meanwhile, a second South African brand had been replicating AG’s success at the entry level. The decade-old Mobicel catered for every budget, if that budget was below R500 to buy the phone outright. At the top end of the market, where that amount and more is spent every single month on contracts, Mobicel was completely unknown.

Soon, that may change. Mobicel is about to venture on the path treaded by AG Mobile when it ventured outside its comfort zone.

There is one fundamental difference, however, said founder and CEO Ridhwan Khan: not only are quantities being carefully managed, but Mobicel is not committing itself to manufacturing capacity that cannot be covered by existing resources, and it is hitting the market with what it calls premium phones, at reasonable prices.

Mobicel founder and CEO Ridhwan Khan

Mobicel founder and CEO Ridhwan Khan

The Mobicel R9 and R9 Plus, launched last week, are rare examples of devices that really can change the mobile game.

The R9 Plus is an Android phone that sports not only a 5.7-inch touch screen, but also edge-to-edge display. Samsung has pioneered the concept with its flagship phones for a number of years, with Apple following suit in its latest iPhones this year. Only LG, with its Q6 released a few months ago, had introduced edge-to-edge screens in a mid-market phone.

So is this a mid-market phone? Perhaps a new category is needed. In a sense, Mobicel is following the lead of Chinese brand Xiaomi, which markets its mid-range smartphones as “high value, affordable devices”. But, at a price of R2 999, the Mobicel R9 Plus probably represents the best value-for-money yet in terms of features versus cost.

The truly remarkable feature of the phone, which does not appear to have been adopted by any other major manufacturer, is that it has flipped the traditional approach of having a premium camera on the rear of the phone and a lower-quality lens on the front for selfies.

With the R9 Plus, the selfie takes pride of place, with a dual front camera. One lens comes in at 20 Megapixels and the other at 8 MP. Mobicel describes it as the “Super Selfie” dual lens camera. It also offers a 120 degree wide angle view, along with “Super Low Light capability”.  And, like most mid- to –high-end phones, it sports a fingerprint sensor.

The slightly stripped down sibling of the Plus, the R9 Lite, will come to market at just under R2000. Both offer a 24-month warranty.

“We’ve created a handset with exceptional build quality, offering the latest technology, and the kind of features only ever before seen on handsets that cost four times as much,” said Kahn.

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Mobicel founder and CEO Ridhwan Khan

“We’ve used our experience, our understanding of the customer base and our economies of scale to offer them an opportunity to migrate from whatever device they’re using to our premium smartphone.”

Mobicel’s stratetic advantage is that it distributes through more than four thousand retail outlets, ranging from the smallest store to large discount chains. It will begin selling the new devices from the beginning of next month, both through retailers and online via Takealot.com.

“There is a big void between phones like the Vodafone Smart Kicka at R399, and the feature-rich smartphones from Samsung and Huawei,” Kahn said in an interview after the launch.

“No one’s filling that massive gap, almost indoctrinating consumers to the idea that if you really want a nice device you have to pay R6000 upward. There’s a massive opportunity. If we can play in the space between R1 500 and R3 000, we will start filling the void.

“Our biggest challenge is making the user experience an awesome one so that when people buy and use the device, whatever reservations they had about the price point is gone. We want people to experience the brand, so we are keeping margins very thin, and a big part of our margin is being put into building a local brand.”

This is uncharted territory for a businessman who entered the cellphone industry in 2002 by bringing in refurbished handsets from the United Kingdom. He would clean them up, and sell them as demo units. By  2007, demand had exceeded supply, and he realised there was a massive market waiting for him.

The first Mobicel handset, back in 2007, was the M404, a1.8-inch dual-SIM feature phone. That’s the year Apple launched the iPhone and sparked the smartphone revolution. It’s taken a decade for Mobicel to break out of the feature phone market, and now it wants to spark an equivalent revolution in the South African mass market.

Said Kahn, “The end game is to provide powerful smartphones without the hefty price tag.”

  • Arthur Goldstuck is founder of World Wide Worx and editor-in-chief of Gadget.co.za. Follow him on Twitter on @art2gee and on YouTube.

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Samsung unleashes the beast

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Most new smartphone releases of the past few years have been like cat-and-mouse games with consumers and each other. It has been as if morsels of cheese are thrown into the box to make it more interesting: a little extra camera here, a little more battery there, and incremental changes to size, speed (more) and weight (less). Each change moves the needle of innovation ever-so-slightly. Until we find ourselves, a few years later, with a handset that is revolutionary compared to six years ago, but an anti-climax relative to six months before.

And then came Samsung. Probably stung by the “incremental improvement” phrase that has become almost a cliché about new Galaxy devices, the Korean giant chose to unleash a beast last week.

The new Galaxy Note 9 is not only the biggest smartphone Samsung has ever released, but one of the biggest flagship handsets that can still be called a phone. With a 6.4” display, it suddenly competes with mini-tablets and gaming consoles, among other devices that had previously faced little contest from handsets.

It offers almost ever cutting edge introduced to the Galaxy S9 and S9+ smartphones earlier this year, including the market-leading f1.5 aperture lens, and an f2.4. telephoto lens, each weighing in at 12 Megapixels. The front lens is equally impressive, with an f1.7 aperture – first introduced on the Note 8 as the widest yet on a selfie camera.

So far, so S9. However, the Note range has always been set apart by its S Pen stylus, and each edition has added new features. Born as a mere pen that writes on screens, it evolved through the likes of pressure sensitivity, allowing for artistic expression, and cut-and-paste text with translation-on-the-fly.

(Click here or below to read more about the Samsung Galaxy S Pen stylus) Samsung Galaxy S9 Features)

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SA ride permit system ‘broken’

Despite the amendments to the National Land Transport Act, ALON LITS, General Manager, Uber in Sub Saharan Africa, believes that many premature given that the necessary, well-functioning systems and processes are not yet in place to make these regulatory changes viable.

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The spirit and intention of the amendments to the National Land Transport Act No 5  (NLTA), 2009 put forward by the Ministry of Transport are to be commended. It is especially pleasing that these amendments include ridesharing and e-hailing operators and drivers as legitimate participants in the country’s public transport system, which point to government’s willingness to embrace the changes and innovation taking place in the country’s transport industry.

However, there are aspects of the proposed amendments that are, at best, premature given that the necessary, well-functioning systems and processes are not yet in place to make these regulatory changes viable.

Of particular concern are the significant financial penalties that will need to be paid by ridesharing and e-hailing companies whose independent operators are found to be transporting passengers without a legal permit issued by the relevant local authority. These fines can be as high as R100 000 per driver operating without a permit. Apart from being an excessive penalty it is grossly unfair given that a large number of local authorities don’t yet have functioning permit issuing systems and processes in place.

The truth is that the operating permit issuance system in South Africa is effectively broken. The application and issuance processes for operating licenses are fundamentally flawed and subject to extensive delays, sometimes over a year in length.  This situation is exacerbated by the fact that it is very difficult for applicants whose permit applications haven’t yet been approved to get reasons for the extensive delays on the issuing of those permits.

Uber has had extensive first-hand experience with the frustratingly slow process of applying for these permits, with drivers often having to wait months and, in some cases more than a year, for their permits.

Sadly, there appears to be no sense of urgency amongst local authorities to prioritise fixing the flawed permit issuing systems and processes or address the large, and growing, backlogs of permit applications. As such, in order for the proposed stringent permit enforcement rules to be effective and fair to all role players, the long-standing issues around permit issuance first need to be addressed. At the very least, before the proposed legislation amendments are implemented, the National Transport Ministry needs to address the following issues:

  1. Efficient processes and systems must be put in place in all local authorities to allow drivers to easily apply for the operating permits they require
  2. Service level agreements need to be put in place with local authorities whereby they are required to assess applications and issue permits within the prescribed 60-day period.
  3. Local authorities need to be given deadlines by which their current permit application backlogs must be addressed to allow for faster processing of new applications once the amendments are promulgated.

If the Transport Ministry implements the proposed legislation amendments before ensuring that these permit issuance challenges are addressed, many drivers will be faced with the difficult choice of either having to operate illegally whilst awaiting their approved permits and risking significant fines and/or arrest, or stopping operations until they receive their permits, thereby losing what is, for many of them, their only source of income.

As such, if the Ministry of Transport is not able to address these particular challenges, it is only reasonable to ask it to reconsider this amendment and delay its implementation until the necessary infrastructure is in place to ensure it does not impact negatively on the country’s transport industry. The legislators must have been aware of the challenges of passing such a significant law, as the Amendment Bill allows for the Minister to use his discretion to delay implementation of provisions for up to 5 years.

Fair trade and healthy competition are the cornerstones of any effective and growing economy. However, these clauses (Section 66 (7) and Section 66A) of the NLTA amendment, as well as the proposal that regulators be given authority to define the geographic locations or zones in which vehicles may operate, are contrary to the spirit of both. As a good corporate citizen, Uber is committed to supplementing and enhancing South Africa’s national transport system and contributing positively to the industry. If passed into law without the revisions suggested above, these new amendments will limit our business and many others from playing the supportive roles we all can, and should, in growing the SA transport and tourism industries as well as many other key economic sectors.

What’s more, if passed as they currently stand, the amendments will effectively limit South African consumers from having full access to the range of convenient transport options they deserve; which has the potential to harm the reputation and credibility of the entire transport industry.

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