This is how Apple and Android smartphones could make millions from third world
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When it comes to third world countries, I don’t see smart-phone manufacturers (except Samsung) concentrating much on how much profit they could generate from the world that is famous for its’ huge middle class population.
In my post below, I will try to highlight how smart-phone manufacturers can dominate to reach out the crowd of zillions to make trillions. I hope this post catches fire and reaches the fathers of smart-phone industries some day and they can look forward to think of making more profit from the countries of the world people rank as “THIRD WORLD”.
Why is expensive smart-phone market slow in Third World countries?
In a third world country like Pakistan, India or Bangladesh, buyers do not go for the option of choosing contract phones. In some parts of the third world, you might not even find contract phones available. There are multiple factors which contribute to this out of which the number one factor is the inflation and job market trend.
In countries like Britain and United States, if a working citizen looses his job, he has the option of making money from odd jobs which might include jobs at a restaurant, gas pump, etc. In the third world countries, wages for odd jobs are so much low that a third world citizen cannot take the risk of owning an expensive smart phone through contract as it would not be affordable. Hence, according to my survey, this is the number one reason why majority of middle class citizens in the third world countries cannot go for a smart-phone well over 200 dollars.
How huge can we label the cellphone market in third world?
I know more than bits and pieces about telecommunication sector because I have been a part of it for a long time. In third world countries, the most successful selling cellphone is Nokia, although compared to Android and Apple, I would say it sucks more than I can think of. The reason for Nokia’s popularity is price. The reason for Nokia’s huge market share it gets from the third world countries is the population that third world countries hold.
In a report I read recently, Pakistan (third world country), is said to be one of the largest SMS user in Asia. Similarly, the population of India is far more greater than that of Pakistan. Hence we can roughly account for the number of cellphones these markets hold.
How can companies like Apple and Android make millions from third world countries?
Android and Apple are brands which many people in third world countries dream to buy. Recently, Samsung launched its Galaxy Y smart-phone as one of the low priced smart-phones in Pakistan. Since it’s launch, Android has caught majority of the market, but it still lacks specs which could give Android a lead in Pakistan’s smart-phone market.
Assume if Android carrying smart-phone company was selling a smart-phone costing $200 and equipped with the latest Android OS, a better LCD but a reasonably light camera (as users in third world look for new OS and interfaces mostly), that Android smart-phone would take the market by storm.
On the other hand, if Apple were to develop a $200 or lower iPhone with variably low technical specs, but the ability to carry the latest iOS, the smart-phone could make millions for the company because again, people in the third world prefer newer interfaces.
The actual market scenario and an example of how much an Apple and Android smart phone make
The actual market scenario is quiet different. I recently conducted a two months survey of the third world market by visiting there local cellphone market in different cities. My users at focus was the middle class sector which is the majority of the country’s population. I did not see much interest in Android smart-phone because users had the opinion that major smart-phones carrying Android were weird named Chinese handsets carrying Android Fryo and they believe they are not as reliable and new as brand name cellphones like Samsung, Nokia, HTC, BlackBerry, Ericsson, etc. Users buying Nokia were more because they believed going for a Symbian or Samsung BADA OS smart-phones was much better as they could not find any new carrying OS Android based smart-phones from the more famous brand names for a cheaper price tag.
How much can a low cost Android and Apple smart-phone make? Here is an example for smart-phones priced at US $150:
Total number of SIMs active in Pakistan according to report: 102.777 million as of June 2010
Let us assume that out of these SIMs 10 million are subtracted owing to inactive ownership or more than one SIM per user.
Total number of cell phones in market: 92.777 million
Out of these, let us subtract another 20 million users that are very poor and cannot afford a smart-phone more than US $70.
Total number of cell phones in market: 72.777 million
Let us remove another 2 million users that are very rich and can afford the most expensive smart-phone easily and another 2 million that do not have the brains and interest to use a smart-phone.
Total number of cell phones in market: 68.777 million
Android smart-phones priced at US$ 150 with reasonable specs but latest OS brought from market assuming it sold 10 million units:
Total amount earned by Android: 1500 million US Dollars
Assumed profit per smart-phone: $ 50
Total profit earned: US $500 million
This is just an example of profit an Android based smart-phone company or iPhone manufacturer, Apple, can make. I think its time that smart-phone manufacturers should start looking at the huge profits they can make during recession from the third world countries and its time some low budget smart-phones with the latest OS be introduced to the world’s cellular market.
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