Bankole’s Newsletter #1

I’m starting a semi-regular series where I share links or news articles I found interesting along with some commentary.

You can leave a comment to let me know what you think.

Less competition in Africa’s smartphone market means higher prices?

According to CounterPoint Research, 500 Brands Exited Smartphone Market During 2017-2023. This is a problem. Africa’s smartphone dreams rely on increased affordability and lower prices. Although smartphone prices dropped over 50% from 2012 to 2017, they have hardly budged since. Smartphones are still expensive to own – the cheapest smartphone is 45% of the average monthly income in Sub-saharan Africa. 1 Even worse, Transsion, the largest manufacturer with 50% of Africa’s smartphone market, will continue to increase prices and sell more expensive phones. (The average selling prices for Transsion phones have gone up 15% each year over the last 2 years). In Nigeria, I remember the influx of Chinese phone manufacturers and their partnership with the phone retailers in Lagos. Every few months, it’ll be a new manufacturer. (Remember Solo Phone?). The market has now settled, competition has cooled and companies are looking to harvest profits. This implies smartphones will become even more out of reach – not only because the economies are not doing well, but the manufacturers will continue to raise prices.

Africa’s startup winter is in full swing 

Startups are raising down rounds. Layoffs, Mergers, Acquisitions and Shutdowns. Reincarnation in some cases. The higher cost of capital is home to roost and Africa’s startups have to face the truth about their business models. In some ways this is not unique to our startups. Na everybody dey feel am. Long term, this can only be a good thing for the ecosystem. We will all learn our lessons from the exuberance of the last few years, and hopefully remember it the next time sentiment shifts. 

Uber hates this app that tells drivers whether it’s worth picking you upRestOfWorld:

Information wants to be free! This app reads the screen for Uber drivers in Brazil and automatically accepts or rejects the fare based on the price per km, protecting drivers from low-value routes. Drivers who use this app have been able to reduce their gasoline costs by 30% (!) while making the same amount of money. Uber was so bothered by this, they took StopClub to court, and lost! There’s big business in information transparency. Pair with this Invest Like The Best podcast episode with Rich Barton, founder of Zillow, Expedia and Glassdoor – on building his entire career around making secret information easily accessible. 

Other stuff

  1. If you look at cost as percentage of monthly GDP per capita, affordability has  increased, but that’s hard to take at face value ↩︎

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