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Vodacom makes smart push to become handset player

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As mobile operators struggle to maintain revenue growth in a saturated market, Vodacom’s own branded phones are making a big impact, writes ARTHUR GOLDSTUCK.

The numbers don’t look good for mobile operators right now.  In their most recent annual results, MTN reported group revenue up 5 per cent, running behind inflation in South Africa. Vodacom’s latest quartely results showed marginally higher growth, at 5.8%, almost catching up to inflation.

The challenge that has faced operators for several years now, as voice revenues plateau and rising data revenues don’t rise fast enough to replace the voice slow-down, has been to find new revenue streams.

Very quietly, they have been doing just that in the handset arena, with MTN punting the locally manufactured Mint devices and now getting behind the rising Chinese brand Xiaomi. Vodacome has taken a far more aggressive approach to this strategy, rolling out a wide range of devices under the brand of its parent company, Vodafone.

No less than six new Vodafone devices have been released in South Africa, with a seventh on the way. There are three likely winners as a result:

  • Vodacom itself will enjoy higher margins from its own devices;
  • Consumers will benefit from high-spec devices at low-end prices; and
  • Their manufacturer, Alcatel, will find itself in the uncustomary position of being a market leader beyond only its entry-level Pixi phones.

Alcatel manufactures Vodafone-branded smartphones by virtue of winning a tender that is put out from time to time. However, it’s not merely a matter of being able to make the phones most cheaply.

Alcatel has proven itself at both the entry-level, with its sub-R600 entry-level smartphone, the Pixi – which has at times been the top-selling phone in southern Africa – and its mid-range Idol phones. This year it also introduced the Go Play ad Pop Star ranges, aimed respectively at active and youth markets.

That cements it as a technology leader in the segments where operators see the biggest opportunity for their own brands. They can’t compete at the high end with the likes of Apple and Samsung, or even Sony and LG, whose brands are associated with both the highest quality and the top specifications available.

However, the real volume in emerging markets comes from mid-range phones costing anywhere from R2 000 to R8 000, and entry-level phones costing less than R1 000.  These are usually not the most profitable phones, as their margins are much lower than those of the big brands’ flagship devices. However, by taking out the cut that goes to the big brands, the cheaper phones suddenly become much more profitable.

In the financial year ending 31 March 2016, Vodacom sold 6,5-million smart devices, of which 25 per cent were Vodafone branded – up from 16.8 per cent a year before. The growth in revenues from this division marginally outpaced overall revenue growth.

This sets the stage for the next big growth spurt in device sales from Vodacom, as it makes the transition away from non-smart handsets. In the year to March, almost 4-million of its 10.4-million device sales fell into the latter category. In the next year, that segment will begin to vanish as the new range kicks in.

The new devices from Vodacom include:

Vodafone Smart platinum 7 LTE Smartphone

The flagship Vodacom phone retailing at a recommended price of R8509, will be available on a 24-month contract at R399 per month.

Customers will also get a Smart VR basic virtual reality headset, and a free one-year subscription to Microsoft Office 365, which includes a license for three devices and 1TB of cloud storage.

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Vodacom Smart ultra 7 LTE Smartphone

The budget alternative to the platinum, at R3 539 for purchase, and R199 per month on contract. It also comes with a one-year Microsoft Office 365 license for three devices, with 1TB of cloud storage. 

Vodacom Smart prime 7 LTE Smartphone

The entry-level big-screen smartphone, at R1 799 outright and R129 per month. Also with Microsoft Office 365 license for three devices and 1TB of cloud storage.

Vodacom Smart Kicka 2

The best value entry-level smartphone on the market, at R499 outright or R59 a month.

The Kicka is the standout devices here. Given the poor exchange rate, it is an absurdly cheap phone, with a powerful quad core processor, 1400 mAh battery, 2Mp camera and 4GB storage, expandable with a micro SD slot. It runs Android 5.1, which just a couple of years ago would have made it a cutting edge phone.

However, the big surprise comes from the flagship phone, the platinum 7. It’s 16MP rear camera produces photos as good as anything outside of the Samsung S6 and S7 devices. Those cost almost twice as much, so one would expect their images to be better, but many other phones costing far more than the Vodafone flagship cannot match its image sharpness. While the phone itself is slow, it is ideal for someone who wants a phone for the camera quality but cannot afford the top of other manufacturers’ ranges.

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

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Smash hits the
Nintendo Switch

Super Smash Bros. delivers what the fans wanted in the latest “Ultimate” instalment, writes BRYAN TURNER.

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Super Smash Bros. Ultimate, the latest addition to the popular Nintendo Smash series, has landed on the Nintendo Switch with a bang, selling 5-million copies in the first week of its release. The game has been long-anticipated since the console’s release, as many fans consider iy to be a Nintendo staple. And the wait was well worth it.

It features 74 playable fighters, 108 stages, almost 1300 Spirit characters to collect while playing, and a single-player Adventure mode that took about three days (or 28 hours) of gameplay to complete. The game offers far more gameplay than its predecessors, making it the Smash game that gives its players the best bang for their buck.

For those new to the game, the goal is to fight opponents and build up their damage score (draining their health) to knock them off the stage eventually. This makes the game seem chaotic, as many players jump around the platforms as if they were on quicksand, in order to avoid being hit by the other players.

It also services two kinds of players: the competitive and the casual.

Competitive players can be matched on the online service by skill ranking to enjoy playing with similarly high-skilled opponents. This is especially important in e-sports training for the game, and for players wanting to master combos against other human players. The casual gamer is also catered for, with eight-player chaos and button-mashing to see who comes out luckiest. This segment is also important for those wanting to learn how to play.

Training mode is also a place to go for those learning to play. It offers “CPU” players that are graded by intensity to train as a single player to learn a character’s moves, combos and general fighting style. More challenging CPU players can also be used by competitive players to train when there isn’t a Wi-Fi connection available.

Direct Play features in this game, allowing two players with two Switch consoles to play against each other over a direct connection – no Wi-Fi needed. This is especially useful to those who want to have a social gaming element on the go, similar to that of the cable connector of the Gameboy.

Click here to read Bryan Turner review of Super Smash Bros. Ultimate.

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Win Funko Fortnite in Vinyl

Gadget and Gammatek have nine Funko Fortnite figurines to give away.

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A Funko Pop figurine based on a character set is indicative of reaching the heights of pop culture. It is no surprise, then, that the world’s biggest online game, Fortnite, has its own line of Funko Pop figurines. The Funkos are modeled on the characters in game, including Drift, Ragnarok, Dark Vanguard, Volar, Tracera Ops, and Sparkle Specialist.

Now, local Funko distributor Gammatek has released the Fortnite figurines in South Africa. To celebrate, Gadget and Gammatek are giving away a set of three Funko Fortnite figurines to each of three readers (9 figurines in total). To enter, first click on your favourite Funko Pop on the next page and post the Tweet that appears. Then, follow Gadget on Twitter.

You can put the tweet in your own words, but entries must have the competition’s hashtag (#FunkoFortnite) and mention @GadgetZA to be considered valid.

Click here to select the Funko Fortnite character you want to tweet.

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