(Bloomberg Businessweek) -- On a hectic road in Lagos, Nigeria, packed with minibuses and motorized rickshaws, ads for the hottest new tech products are plastered all over a crowded electronics mart. A giant billboard looms above, displaying Tecno Mobile Ltd.’s Camon phones featuring artificial intelligence imaging. There are glass cases facing the sidewalks chock-full of sub-$150 smartphones from Infinix Mobility Ltd. and Itel Mobile Ltd. A wide banner shows off Oraimo SpacePods with earbud audio tuning by Afrobeat superstar Burna Boy.
These brands may not be familiar to most Americans or Europeans, but they’re dominant throughout Africa. They’re also all owned by the same company: the Chinese manufacturer Shenzhen Transsion Holdings Co.
Transsion has marketed its Tecno phones on the continent since 2006. Two years later, after the iPhone came out, the company decided to focus exclusively on sub-Saharan customers, first with so-called feature phones—low-cost devices with fewer capabilities and inevitably thinner margins. It was a gamble that consumers in the world’s second-most populous continent would eventually be ready for higher-end gadgets, according to Canalys mobile analyst Manish Pravinkumar.
Transsion stunned industry observers by leaping to No. 4 on research firm IDC’s global rankings of smartphone market share in the first quarter of 2024, with 85% year-over-year growth in shipment volume. Although the company has since dropped to No. 6, it’s clear the window is now open to capitalize on its long game.
Catering to African consumer habits has been a key focus for Transsion. Over the years it’s developed handsets with multiple slots for SIM cards, because Africans frequently switched telecommunications providers for better service. The company equipped devices with camera sensors that improved photo captures of darker skin tones, as well as robust audio modules for locals who also use their phones as music speakers. “Only when companies truly respect the local culture and tradition in a market could they gain a foothold,” the company’s founder, Zhu Zhaojiang, once told China’s state-backed Global Times.
Zhu has always been fixated on reducing supply chain costs so even the company’s cheapest products can turn a profit, according to a Transsion executive, who spoke on condition of anonymity because they weren’t authorized to speak publicly. Some of its phones in the 2010s sold for $20 or less.
Transsion split its offerings across a trio of brands then available only in Africa—which, somehow, made the Chinese products seem vaguely homegrown. Itel offered entry-level devices, and Tecno and Infinix had more upscale smartphones, available for a few hundred dollars. Pravinkumar says retailers fight for Transsion’s device stock. “If you don’t have a Tecno phone inside your store, you’re a loser,” he says.
Transsion now commands roughly half the African smartphone market and an even bigger share of feature phones. It’s also found success expanding into parts of Asia and the Middle East; the company now draws most of its revenue from regions outside Africa, highlighting the global potential of the Transsion model. In India, for example, its budget 5G phones are catching on, and it’s invested significantly in local manufacturing and marketing. Meanwhile, its Spotify-like music service, Boomplay, has more than 90 million monthly active listeners worldwide, and it also has news and payments apps.
In June, IDC reported that smartphone shipments in Africa earlier this year had surpassed those of feature phones for the first time. The shift is an opportunity for Transsion, but it also means fiercer competition from Xiaomi, Samsung, Oppo and even Apple. The Transsion executive says it will be a huge challenge for the company to retain its sheen as more international brands come within reach of African buyers. “As people get wealthier, they want more technology and higher-quality phones,” the exec says. “Some would still rather buy a secondhand iPhone than a new Tecno.”
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