Huawei Expands Reach in Africa

Participation in Microsoft's 4Afrika Initiative Gives Chinese Player Greater Coverage


Earlier this month Microsoft launched the 4Afrika Initiative. The software company aims to invest $74 million over the next three years to support economic development in Africa. As part of the project Huawei has released a budget Windows Phone 8 device called the Huawei 4Afrika, which will be tailored for and exclusively available in some African countries.

4afrika

I was a little surprised that Microsoft had decided to work with Huawei on such a product. Given Microsoft's closer relationship with Nokia, coupled with Nokia's previous experience in similar development programmes including Nokia Money and Life Tools, I would have expected a Nokia phone to be the project's first offering. What's more, recent growth in Windows Phone 8 sales has mostly come from Nokia's Lumia products, particularly in emerging markets like India.

I believe Microsoft selected Huawei because it could provide the most affordable Windows Phone 8 handset. This is hugely important for consumers in Africa, where prices are not always subsidised by network operators and the average income is relatively low. The recent popularity of low-cost Chinese smartphones in East Asia and India shows how consumers are becoming increasingly persuaded by price and not brand.

Microsoft has said the Huawei 4Afrika is a variant of the Huawei W1. Our estimates from this month's Wholesale Pricing report put the Huawei W1 at about €30 less than Nokia's Lumia 620. The Huawei 4Afrika is reported to cost about $150 when it finally reaches retail stores.

Clearly Microsoft is making a big investment in Africa because there's so much potential growth in technology adoption, including smartphones. But I believe this is a bigger win for Huawei. The company will be able to use the 4Afrika Initiative to expand its distribution points across Africa. Huawei sees Africa as one of its fastest-growing markets outside China; this gives the collaboration with Microsoft added significance. I wouldn't be surprised to see Huawei make further similar announcements in the next month or so.

This entry was posted on February 12th, 2013 and is filed under Devices. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted By Digantam Gurung On February 12th, 2013


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