AFRICANGLOBE – There are basically two ways innovation spreads through a market: from the top down, and from the bottom up. From the top down, an expensive innovation enters the market as a premium product and, as technology improves and economies of scale kick in, spreads down until it’s in everyone’s hands. That was how the car spread, for instance.
But there’s bottom-up, or disruptive innovation: A new product comes in that’s under-featured, but cheaper and serving an under-served segment of the market; as the technology improves and the market grows, that new innovation eats up more and more of the value in the market. (You’re probably familiar with this disruptive innovation framework as highlighted most prominently by Clayton Christensen.)
So far, the smartphone has been a top-down story. But where could disruptive innovation in mobile come from?
Could disruptive mobile innovation in mobile come from Africa? Here are some ways Africa could pioneer the future of mobile:
Payments. This is by now the obvious one. Countries like Kenya are very far ahead of the rich world in terms of adoption of mobile payments. With services like M-Pesa and others, people can store money in their phone and transfer it to other people with a few taps, paying for cabs, bar tabs, and even utilities and taxes. Today, the amount of money transferred using mobile represents more than a quarter of Kenya’s GDP, an astonishing number. This is another example of “leapfrog” innovation: the reason why Kenyans all flocked to mobile payments when they became available was because most of them didn’t have bank accounts. Mobile money has transformed Kenyan society, by making money more secure, allowing people to save and build up some financial security, and by reducing the ranks of the unbanked, who do not have access to financial services. For the future of mobile payments, you have to look at Africa.
Omnipresent wireless broadband. Bringing phone service to the African continent required a lot of innovation. Cheap, durable routers and networking equipment had to be invented and manufactured. An unreliable grid had to be worked around (many cell phone transmitting stations are solar-powered, an innovation that is slowly making its way to the rich world). Redundancies had to be built into the system for contingencies. Upgrading that infrastructure to broadband will be a lot easier than building it in the first place. What’s more, innovations like Google’s Project Loon and others like it will probably see the day first in countries that have the most to gain by betting on unproven technologies. It’s quite possible that we will see faster mobile internet in Africa than in many places in the rich world.
Lean, cheap phones. So far, the energy of the highest-profile smartphone manufacturers hasn’t been spent on cost, or things like optimizing memory. When you make your margin on high-end smartphones that are subsidized to the end consumer by their carrier, that’s not really the priority. The priority is to make a gorgeous consumer product that will double as a fashion statement. In Africa, to say the least, most people can’t afford the latest iPhone, Nexus or Galaxy. And most phones are prepaid. But Chinese manufacturers like ZTE, who are all about efficiency and low costs, know there is a huge opportunity for lean, cheap, but functional smartphones in the developing world. That is also the opportunity Firefox OS is going after. Those phones will probably one day be the world’s best-sellers, not the iPhone.
Health. In a previous column, I speculated that the phone will make your doctor go the way of the dodo bird, as we turn to our AI-enabled smartphones for diagnosis and booking medical services. Africa could lead the way there too. Again leapfrogging the West because of poor infrastructure—in this case, a dearth of doctors and other medical services—Africans are already turning to mobile for health information on platforms like MAMA and other health services. Could the kind of health-related mobile service I envision take off in Africa first? It’s possible.
Commerce. Again, lack of infrastructure, in this case retail, is leading to leapfrogging. In the West, ordering something on your smartphone and then picking it up from a locker is still experimental. It is more developed in places like South Africa. With the absence of megamalls, and with already high penetration of mobile payment services, it makes sense that m-commerce innovation will happen first in Africa.
When we think “future of mobile”, we don’t typically think “Africa.” But then again, before 2007, we didn’t typically think “Apple,” and look what happened.
By: Pascal-Emmanuel Gobry