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2019 – the mobile year ahead

As we all get to grips with starting the working year ahead, I would like to take a look at what the future holds for the mobile phone brands in South Africa. Traditionally, December is our busiest month where we sell the most mobile devices for the year. December 2018, however, was somewhat muted and we found some interesting trends carrying us into the new year.

So how are the big three (Apple, Samsung and Huawei) doing and what’s their outlook looking like for 2019? With our economy not having a stellar time, we have picked up two clear patterns emerging, with South African consumers, looking at their next mobile phone purchase:

Firstly, they are shopping down (or sticking to a tight budget range). The aspirational drive to have the “latest” top of the range model is in decline.

Our Top 10, handset sales for the December period is a testament to this with our top seller being the Huawei P20 Light. Across all brands, manufacturer “flagship” phones were massively out-sold by the mid-tier cousins. In the past, consumers would be more willing to splash out to acquire the latest and greatest, with lesser device variations largely ignored.

Secondly, customers are opting to hold on to their existing mobile phones and are instead optimising their monthly contract spend with reduced rates on “no device” contract deals.

So, other than a stalling economy, what has changed? Our sales trends and customer feedback show a few factors influencing the purchasing behaviour, which I will touch on.

Price: This probably has the most significant influence on purchasing behaviour currently. With new flagship phones ranging from R17 000 to over R30 000 on prepaid OR between R800 and R1000 per month on a low-value contract deal (offering little to no data or calls), consumers are finding it extremely difficult to justify the massive premium.

Technology: In the past, each new handset release used to herald some great NEW feature. If you weren’t able to utilise/ show off your new tech, you felt you were left behind. In today’s phone landscape, however, the majority of us use our phones for 4 or 5 essential apps – WhatsApp, Instagram, Facebook, Banking and one or two others. There is no need to have the latest tech to keep up. If the camera is good enough to make your social media posts look lit, you are winning. The gap between a mid-tier and flagship phone has shrunk and is no longer a debilitating choice.

Style: this probably is the most glaring change in handset development. In days gone by when you put your new iPhone 6 (new shape) or Samsung S6 Edge (curved screen) on the coffee shop table, next to any previous version, the new designs were instantly recognisable. You could be the envy of your friends by displaying your new social enabler at Bootleggers in Sea Point. Today, however, handset designs have all but morphed into one. So much so that it’s hard to tell your Samsung A7 from your S9, your Huawei P20 from your Y7, your Apple X from your XR and heaven forbid your Apple from a Huawei.

So where do the handset companies go from here?

Both Samsung and Apple have had a disappointing end to 2018. The start to 2019 shows no change, with both leading manufacturers displaying flagging sales and ever stiffer competition from Chinese manufacturers.

Apple’s issues are largely by their own design and, I feel, they have finally reached the tipping point. Their business model, in the past, was to create hype around their new devices, starve supply and drive demand like no other. Every 2nd model in the product life cycle would go through a complete design change and, coupled with a few new software features which could only be used on the new models. They drove the “upgrade” cycle – with annual updates but, if your iPhone got to two generations old, you were seriously behind. If you had the iPhone 5, you would not get the 5S you would wait for the iPhone 6. If you had the 6S, why get the 7? You would wait for the iPhone 8. Their strategy tied in perfectly with the 24-month contract/ upgrade cycle.

Then things started to change; we lost the 3.5mm jack, and we hesitated. We lost fingerprint unlocking, so we waited even more. It felt like we were getting less but expected to pay more for the privilege of having a “better” design. We started questioning what the actual hardware “upgrades” were and were they even worthwhile? My iPhone 7 Plus works great, I won’t get the X, let me rather wait for the XS. The XS arrives, but the price is so much more than I am paying for my 7 Plus. Can I justify the upgrade? Maybe I should go with the more affordable XR – but it just has a single camera. Why should I pay more and get less? My choice is simple.

For a long period, the Apple ecosystem created the stickiness that bound users into getting the next iPhone, “but all my music is on iTunes” OR, “how will I share all my photos” and now with Apple expanding its content services to include Amazon and Samsung have they removed this glue?

Finally, for Apple, the devices generally are pretty robust, and with more and more reputable repair outlets providing battery replacements for your old iPhone you can easily extend the life of your devices for a few more years.

For Samsung, the problem has been around for the past 6 or 7 years. Because their desire to dominate the industry is embedded in the corporate culture, the product line and range is there to squeeze out all potential competition. By covering every single product niche with a model, you don’t create many gaps for your competitors to muscle in. Their short-sightedness of this approach has however meant that they cannibalise their market across their ranges.

From a marketing perspective, the focus has always been on their premium devices, and the myriad of other are left to find their own space in a flooded market. On the flagship side, they have had a similar problem as with Apple. For 2019 though, they will be unveiling a foldable screen phone which will herald a real innovation in the industry but when you look at those 3 or 4 essential apps again how do you build a camera into a foldable design? So, while flexible screens are great for media consumption, will they be a hindrance in media creation?

The main problem for Samsung has been their product range, and while they have been trying to reduce the size of the product portfolio the gaps between models in just so small, it makes it easier to shop down. Design and tech have become so similar across models that it’s hard for me to tell one device from another, and I work in the industry – heaven help a poor consumer. If you had to lay out a Samsung J8 and A8 (R80 per month price difference) or a J6 and A7(R150 per month price difference), you will be hard pressed to spot the difference. To be fair the A7 has three cameras and is far superior, but you get my point.

If BMW used the same body for its X1 /X2 and X3 models, and you couldn’t tell them apart, and they all performed equally well in your city commute… Would you buy the cheaper X1 or pricey X3?

Finally, Huawei, they have been a dominating force, in our channel, over the last year. Much like Hyundai, when it first appeared in South Africa, people viewed the brand with scepticism, but over time they have proven they are a solid proposition in the market. Initially, Huawei focused heavily on the lower and mid-tier market which, in hindsight, was a masterstroke (whether by design or pure chance) as they established themselves as a reliable brand that produced quality devices and reasonable pricing. They have slowly pushed into the premium sector and now are contending and even surpassing the big two (Samsung and Apple) in the flagship space.

In general, Huawei offers incredible value for their price points. They are however beginning to make the mistake Samsung made – an ever-expanding product portfolio. For now, this is mitigated by a good pricing glide strategy but, it is a tight rope to walk with the ever-present cannibalisation threat.

So, for 2019, Apple has already started shifting its focus from hardware to expanding its iTunes and Apple TV partnerships to incorporate the likes of Amazon (Alexa) and Samsung (Smart TV). Is this their fundamental shift in strategy to make up for lagging handset sales?
Samsung is heavily reliant on selling components like screens and memory to the likes of Apple and Huawei to help fund its R&D and drive down the costs of innovation, with Apple sales slowing down will we see a far more measured approach to new product launches in 2019 and beyond?

And, finally, with Huawei is the global furore around 5G and security of Huawei built networks in the USA and Europe and their devices being banned in some countries, going to see them increasing their aggressive push into Africa?

The last quarter of 2018 highlighted these changes in consumer spending. The cellular market is brutal – look at the likes of Ericsson, Motorola, BlackBerry and even (the now reborn) Nokia. Will the big three stick to their guns? Will their plans for 2019 be successful? Or, is this an opening for a new company to challenge the status quo? We are excited, are you?

 

By: Chris Henschel

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ENERGEA WiDisc 75 – The 7.5W Difference

The simple charging cable – while still a useful little tool I am sure we can all be honest- they were very last year! Anyone and I mean anyone who has ever owned a phone will no doubt be able to regale you with tales of frayed cables and scientific calculations on which way to put the darned thing in without damaging your port.

With the introduction of wireless charging (albeit on certain devices only) the need for the cable is fast disappearing. Imagine a device that is a one charge fits all. We have it! No need to carry around three different types of cable with our Energea WiDisc 75 Wireless Charger you can pop any Qi-enabled device on and charge away – truly universal charging!

What’s more our charging pad comes enabled with 5W/7.5W and 10W support so no matter what device you have it will automatically detect and charge at your phone’s optimum charging level. For me, having one wireless charger in my home and another at work is fantastic. I don’t have to look around and bend into all sorts of positions to charge my device – I merely pop it down on the charging pad and go about my day.

iPhone or Android – both are welcome. And before the Apple lovers out there look to the more expensive 5W/10W chargers- here’s a secret: Your iPhone 8 or X range charge at an optimum level of 7.5W. 10W charger? No dice- it will revert to the lower and slower 5W. If you are looking for optimal charging, make sure your wireless charger supports 7.5W charging.

Other cool features on this device are your circuit protection and its non-slip grip. I am sure we can all agree that a cable far outweighs your phone flying through the air and smashing gloriously into the ground. Coupled with this are the lightweight and compact design making it easy to pop in your handbag or briefcase- even pocket in a pinch.
Any 1.5M (and longer) cable worth its salt is going to set you back R299 or more so with the Energea WiDisc 75 retailing at R599 it’s a real winner.

And, an FYI, we have learned that Huawei has developed a wireless charger that will support 15W charging and sport a silicone surface (no slipping off of your phone) However, we can only look forward to this early next year.

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Have they gone too far?

It seems the days of the excitement and high expectation over the next mobile launch is well and truly over.

When I started in the industry in the mid 90’s, we had perhaps three or four launches to attend a year. Every launch cycle offered innovations and great leaps forward in tech. We started with brick phones and monochromatic screens, moved to the tiniest phones with colour and changed from numeric keypads to full qwerty keyboards and now to full touch.

I can still remember the excitement of holding that curved Nokia 8110, the tiny Ericsson 788, seeing the colour screen on the Siemens S10 and showing off my Nokia 9110 Communicator with its full keyboard, the Samsung D500 slider… the list could go on and on!

This excitement carried over to the revolution heralded by the Apple iPhone, and it appeared this excitement curve trajectory would continue unabated.

Alas, it appears in the last two years, the mobile magic has gone.

I had no desire to upgrade my iPhone 7 when the iPhone X launched, partly because it always has better to wait for Apple to iron out any kinks in their “S” version but mainly because the price differential between new and old had become somewhat glaring.

In my wait for the next Apple launch, I have been using a Huawei P20 Pro and, after five months, I haven’t had a reason to move back. That was of course until the lead up to the Apple announcement on the 12th of September. Ohhhh I thought, perhaps the new model is going to be awesome, maybe we could fall in love again…

After the announcement, I was left feeling even more disappointed. The price of the new iPhone is sky high and, I feel not much has been offered to enhance my user experience. I find myself thinking… has Apple gone a step too far this time?

Apple and Samsung have been chasing the title of world’s best smartphone for the past ten years, with Apple always commanding a premium for its devices. Samsung, in hot pursuit, began increasing the prices of its iconic top-end phones to try and mirror the exclusiveness of the Apple brand.

In November IHS Markit estimated it cost around $370.25 to make the iPhone X which retailed at $999, that’s a massive $628.75 in profit per device. Understandably for most manufacturers, you spend a lot on R&D and then advertising and marketing, but a 170% markup is astronomical.

Much of the R&D tech is licensed or on-sold to other manufacturers. For example, Samsung is the biggest supplier of screen components for electronics. Sony provides camera tech to many manufacturers. Through technology licensing, R&D costs are recovered and often become profit centres. Face recognition and fingerprint tech were initially introduced exclusively on premium devices, but they were quickly adopted in mid-tier devices. The economies of scale made the tech cheaper for everyone.

Now, Samsung and, more recently, Apple have announced their new iconic premium devices, both starting at $999 and with little in the way of advances over their predecessors. I once again question the sustainability of launching a premium device annually with little more than a few tweaks.

My MacBook Pro has lasted me five years, and my iPad is pushing its 3rd year of use. With Mac and iPad offering a pleasing level of performance for an extended duration, they were shrewd buys. I don’t mind paying a premium for this longevity.

With that said, has the need for the latest iPhone quietly died and been replaced with a more sombre approach to affordability and lifetime usage. I predict it has. Perhaps the mobile industry needs to rethink its obsession with launching a flagship phone every year to try and push more profits and focus instead on sustainability.

Much like the car market, most supercars can go 0-100 in under five seconds. If you can afford it, you buy the brand that appeals to you the most – be it a Porsche, Lamborghini or a Ferrari. For those of us that can’t, you can still buy a car for way, way, way less and still be a happy robot racer.

With basic usage and functionality remaining almost on a par, consumers will seek a solid middle ground. So, this year I won’t be getting a new iPhone XS or the Samsung Note 9. But, I will consider upgrading my MacBook Pro or my iPad – at least that’s a sensible long-term buy.

By Chris Henchel

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Upgrade or UpCycle?

With phones becoming ludicrously expensive and mobile technology seeming to have plateaued in terms of feature sets, is it really worthwhile upgrading to the latest flagship model?

If we take a look at the car market in the early 90’s, it was all about whom could go the fastest from 0-100. By the 2000’s most sports cars where doing sub 5 sec runs and by the 2010, you could get more than a few hot hatches doing sub 7 second runs.

So as technology starts to become more accessible, the middle and entry level tiers start catching up in performance. You then start questioning the price to performance ratio of say buying a Ford Focus RS (4.7 secs 0 to 100 kmh) for R699 900 against buying a Porsche 718 Cayman for R920 000 to go slower at 5.1 secs, but having a perceived quicker flashier car.

 

The vast majority of us use our phones for the “bare” basics – give me a good camera, whatsapp, a decent battery life and an easy enough user interface and I am happy. The days of having the latest phone and proudly displaying it on the coffee shop table to elicit ohhhh’s and ahhh’s from your friends are long over. Today, most of the phones look pretty much androgynous and few deliver little in the way of a revolutionary experience.

When you start paying upwards of R15 000 for a phone you have to start questioning your behaviour. The latest Samsung Note8 is going to set you back R17 899 and the latest iPhone X costing $999 before taxes and duties you will be looking at around R15- 17K.
What can you get for R15K in todays tech space?

A new cool camera? Nikon Coolpix B700 @ R6499
A smartwatch / fitness tracker? Tom Tom Spark 3 @ R1899
A new LED TV? 50″ Hisense UHD LED TV @ R6999
A new decent smart phone? Huawei P10 Lite @ R4999

Justifying a phone over 15K becomes increasingly difficult! But us humans are a funny old species, and having the latest trinkets and desirables is pretty hard grained into some of us. For those such afflicted, we crave the newest, fastest and flashiest gadgets on the planet, all to ensure that we stay ahead of the pack. For an increasingly online, social media driven world our mobile is our gateway to our interwoven digital and physical existence and if we going to have a gateway, it better be damn magical.

So do you succumb to the iPhone 8, wait out for the iPhone X (its referred to as the “ten”) or keep on trudging along with your 7, or even your faithful old iPhone 6? That my friends is the question indeed.
If you have a 7, I wouldn’t bother with the 8, hell even if you have the 6S theirs not much incentive to go rush out and get the 8. My bet is waiting out for the Ten, at least the tech has been enhanced and the new camera features and animoji only work with the new Ten hardware.

Then of course if you throw the price in the mix, paying an extra R3 – R5K cash (roughly R175 a more per month on contract) for the Ten is hard to justify if you are replacing an iPhone 5 or an old 6. The new “old” 8 becomes an option but even more so would be the iPhone 7 which is certain to drop in price.

Best of all, if you have an old iPhone 5/6/7 which is still in great working order but the battery is getting a little tired, the folks from Apple Doctor can “UpCycle” your old faithful with a new battery and make her as good as new. An “UpCycle” costs as little as R289 fully installed – Upgrade or #UpCycle?

cellucity.co.za

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What’s in a name? Breaking into the market

Even after 10 years in the industry I still wonder about how clients make choices on phones. I mean, for instance, what makes one choose a mid-range phone from a “Premier Brand” (read “popular”) phone rather that a similar priced premier rated phone produced by a newcomer? Continue reading What’s in a name? Breaking into the market

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Porting

Back in the day if you were unsatisfied with your service provider, had poor signal or just wanted a change you had to kiss your cellphone number goodbye. Porting has revolutionized the cellular industry allowing customers to be selective without having to worry about losing their number.

With over 30 stores nationwide and as an industry leader, Cellucity is positioned to provide you with unparalleled service. Offering friendly sales expertise, onsite data support and a range of accessories to kit you out – I believe Cellucity offers a complete and uncomplicated mobile shopping experience. Continue reading Porting

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South African Lingo

They call us the Rainbow Nation, a multicultural diversity of different people from different walks of life all living together in South Africa, a country alive with adventure. Arguably one of the more popular tourist destinations, as a visitor you are likely to hear a number of strange words and confusing sentences. We have 11 official languages so they were bound to mix together to create what we proudly know as South Africanisms. As always we like to make sure our clients are well informed, so here is a handy guide to some of the more popular South Africanisms:

Continue reading South African Lingo

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B4i Travel – Talk Like a Local

I don’t know about you, but as much as I love a holiday, I hate the planning that’s involved! I mean Visas, travel arrangements, hotel arrangements, currency (yuck)! I wish there was a magic wand that I could wave and have it all sorted! Now what I can do to make your life a little easier, you intrepid traveller you, is to introduce you to a service called B4i.travel. Continue reading B4i Travel – Talk Like a Local

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Pokemon GO – the effect

So the craze that has gripped the world! If you don’t know about it already, you are probably not ever going to play it 🙂 A game played on your smartphone, that uses Google maps and augmented reality to encourage players to get outside and be active – purpose explore the world outdoors whilst trying to catch Pokemon creatures! Once you have got a little menagerie going you can train them, power them up and battle fellow players.

By using your smartphones GPS location and Google maps, the app has a big drain on your battery and to a lesser degree a drain on your data bundle! Firstly an hours playing can deplete around 20% of your battery life, so if you going to be going on an epic Pokemon catching spree, having a power bank is an ideal option (check out our online store for some great options). Secondly how much data will you use whilst catching and training your Pokemon’s? Data from Verizon in the USA tallies it up at around 10MB per hour, we tested it at our Cape Town Head Office and were using 12MB an hour, so it is relatively light on data usage. It is advisable however to ensure you have a data bundle loaded so you don’t get stung by the OoB (out of bundle) shark.

Forewarned, forearmed… now GO track down Pikachu!

Pikachu - the original pocket monster