Gauteng Business News

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INFOTECH: Tune in or Tune Out


Recent Gauteng Business News

The South African mobile landscape is very different from the US and European one. When implementing mobile technology for marketing or for business processes, business leaders best tune-in locally before they are tuned out.

For business leaders and marketing professionals, the temptation to follow developed market trends when designing marketing campaigns or deciding how to improve business processes through the adoption of mobile devices is strong but misleading. The reality of the mobile market in South Africa, says CEO of Virtual Mobile Technologies, Wilter du Toit, is vastly different to developed markets adding that “Seeing what happens in developed countries and basing decisions on that will end up causing trouble for businesses,”

Mobile technologies offer businesses new ways of reaching and interacting with consumers and clients, and improved communication platforms that can help streamline business processes. With every new technology that emerges, depending on how disruptive it is, shifts in business and communications models occur. It is here that the temptation to merely adopt every new thing on the market can become problematic.

“Consider personal computing as an example, the development of the technology disrupted how people were doing things, how they were communicating and how things were produced,” he said. “From the very first computer, which took up an entire room, to the first personal computer and now to mobile phones, there have been considerable shifts in the daily workings of business and of personal life.”

Du Toit adds that along the continuum of the development of the computer and Internet, each shift lasts roughly ten years.

And so today’s trends might very well be obsolete tomorrow. This is why, du Toit said, it is so important for businesses to understand the technology, identify what it is they want to achieve by adopting a certain technology, and then monitor very closely the returns they’re getting from their investments into new technology adoption.

When it comes to mobile technology, companies in South Africa have been easily misled by developed market trends.

“If one relies on the US and European press alone to stay informed of the growing trends one may think that any business process or marketing campaign today should be targeted exclusively at smart phones, specifically iPhone and Android” he said. “That might be true in Europe, but that’s definitely not true for South Africa or the rest of the emerging markets. In emerging markets, mobile deployments should be targeted at both smart phones and feature phones in order to have any hope of achieving targeted ROI.”

Although there has been a buzz around smart phones the reality, proven in The Mobile Consumer in SA report, is that most South Africans only have access to feature phones. The three most popular mobile phones in the country are the Nokia 5110, Blackberry 8250, and Samsung E250.

The report, conducted by World Wide Worx and supported by First National Bank, found that Nokia is the most popular phone in the country, holding 50% of market share. And it is expected to hold this percentage until the end of 2013.

The second most popular phone is the Blackberry, which has 18% market share. This is expected to grow as 16% of cellphone users said they’d buy a Blackberry next.

These numbers are in direct contrast to developed market numbers where Nokia and Blackberry both face decline in the marketplace.

The report also said that iPhones have held only 1% of the market for the passed 18 month, and its share isn’t expected to grow much, suggesting that it will remain a ‘toy’ of the elite.

Arthur Goldstuck, managing director of World Wide Worx, said in a release: “The iPhone is an aspirational phone that is mostly out of reach for the majority. The Blackberry is also an aspirational phone but is in reach for most people.”

What this means is that most cellphone users in South Africa have the first generation capabilities that all feature phones possess: SMS, USSD, mobi sites and native applications. The majority do not own second-generation phones, smart phones (they hold a combined market share of only 3%), that have HTML5.

“This is where one can see that US analysts are completely irrelevant to the South African context,” said du Toit. “When making decisions about improving business processes through mobile technology or by rolling out elaborate mobile marketing campaigns, businesses best understand the realities and implications of the local context.”

Before implementing a current trend, du Toit suggests starting with a four-point checklist: identify the priorities for improvement – what aspects of a business need improving soonest, determine the return on investment of a first-generation improvement, determine the return on investment of second-generation improvement, and then select the technology based on the target audience.

And so while both feature phones and smart phones offer second generation capabilities, companies should consider first generation improvements and then explicitly consider second generation improvements to make sure they are taking full advantage of the new technology’s capabilities.

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