Cashing in on smart apps for dumb phones

28 July 2016 - 09:54 By Bloomberg

Africa's startups are seizing an opportunity they say Google and Apple have missed - making apps for non-smartphones.In a region where the average customer doesn't own a smartphone or a bank card, hundreds of millions of people use basic phone. That's prompting developers to build no-frills, text-based apps, keeping data consumption down.Orange SA recently set up a development lab in Cameroon after opening similar hubs in Ivory Coast and Senegal in the past year."Africa isn't a lagging copycat market to the US or Europe," said Bénédicte David, who heads strategy in the region for Orange."What works here won't necessarily fit there. There are specific local needs and opportunities."Smartphones allow users to perform all the functions they might do at work, from editing documents and spreadsheets to browsing the web, as well as tap into a wide range of third-party applications. That market is dominated by Apple and Samsung.Feature phones are much simpler and cheaper phones, with smaller screens that are mostly used for calling and texting.Japan's Kyocera and Blue Products make popular feature phones.Non-smartphone apps include a text message service for soccer scores, one that provides agricultural data and an SMS service that uses back and forth text messages to manage hospital drug stocks.Consumers are charged on their prepaid phone account or monthly bill for these services, mostly on a per-use basis, and carriers cut a deal with developers to receive distribution fees or shared revenue.Carriers are organising startup pitches in Africa and making parts of their network technology available for entrepreneurs to integrate their new services into.They're also developing apps themselves. The more new services subscribers are attracted to use, the greater the potential phone bills each month.MTN partnered with Zambian entrepreneur hub BongoHive and said it would sponsor local technology and provide access to its network's assets to startups."Those who think there's no money to be made in Africa are wrong," said Pierre Gattaz, head of France's business lobbyist Medef."In some cases, it's proving more lucrative than smartphones, because of scale," said Arnauld Blondet, head of marketing for Africa and the Middle East at Orange. ..

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