How to make a killing in mobile
The vacuum soon to be created by Microsoft is a massive opportunity
Microsoft is killing off Nokia’s Symbian feature phone range along with its Asha and X products. According to The Verge Microsoft is refocusing its mobile department on Windows Phone and scaling down on the lower-end hardware operations it acquired with Nokia’s handset division. In emerging markets, feature phones are king and the Asha range is very popular. Want to make a killing in mobile? Fill the crevice that Nokia’s departure will create.
There are 5 billion mobile phones in the world today and only 1 bilion of them are smartphones. Feature phones still account for 65% of the market in Africa, for example, and their popularity has nothing to do with operating systems.
Feature phones are cheap — as little as $5 in my home country of South Africa — and have batteries that last for up to three weeks. They can be bought almost anywhere and treated as disposable. And they won’t be going away any time soon.
Don’t let the small price tag fool you either. Manufacturers make decent margins on these products. The popular Nokia 105 feature phone, for example, earns the company about the same margin as its higher-end Lumia devices.
The Asha range has also been increasingly succesful in markets such as Kenya and India where Nokia continues to sell more feature phones than any other manufacturer. Asha offers things like dual-SIM functionality and smartphone-like apps on a platform that is affordable and meets some of the criteria, mentioned above, that make feature phones popular.
I don’t disagree with Microsoft’s new direction. It’s a bold move and should be commended. Making tough calls to refocus the business is long overdue. It does mean saying goodbye to a massive segment of the mobile market, however, where Nokia is still a leader. Whoever tackles the void will be richly rewarded.
