With the liberalisation of the telecoms sector more than a decade ago came the influx of different devices into the country. Many of these products were brought in through unapproved routes, thus depriving the Federal Government of its revenue. In this interview with LUCAS AJANAKU, the Director, Hand Held Products, Samsung West Africa, Emmanouil Revmatas, speaks on the problems of the mobile phone industry, how to solve them and other issues. Excerpts.
How will you assess the mobile phone market in Nigeria?
It’s been great. I was here nearly 10 years ago, in the early phase of the evolution of the mobile industry and returned to Nigeria last year. I found that the market is as dynamic as it was 10 years ago. If you look at some of the developments, of course you know the operators have improved their network capabilities and you find that data is becoming more available to many people particularly in the rural areas and of course, you know the space Samsung dominates across the world is the smartphone arena, has grown enormously.
This year, we are estimating that 40 per cent of all smartphones in Africa will be sold in Nigeria. This means that Nigeria is booming in terms of the mobile phone industry. Although I think users have become smarter and more selective, there is a lot more because the devices are becoming multi-media devices, not necessarily being able to do voice and short message service (SMS) but they are now expected to be able to access the World Wide Web as well as – connecting to various social network activities that have become part of everyday life.
You said about 40 per cent smart devices that will be sold in Africa will be sold in Nigeria, underscoring the hugeness of the market. Why is Samsung not considering establishing a factory in Nigeria, not only to serve her huge market but also that of the entire sub-region?
This is a question that is raised on a regular basis. Let’s take one step back. I think first of all, as an OEM (original equipment manufacturer), Smasung, particularly has made huge investment in Nigeria. If you look at the numerous projects we are involved in, from the corporate social responsibility investment perspective. I will use the investment rather than responsibility because we have done some very big projects in Ekiti and we have also established the first Samsung Electronics Engineering Academy in Ikeja, Lagos where we have been busy training large group of students in various technical skills and I think for many people, they don’t realise that for our consumer electronics business, a vast majority of our products are assembled in local assembly plant. If you take a look at our air conditioners and other consumer electronics products, we have a very big commitment in terms of assembly plants right here in Lagos.
In terms of the mobile industry, it is a little bit more complex because of course, you deal with a lot more components that come from distant sources. At the moment, quite honestly, the challenge of trying to consolidate all of those components in Nigeria and having to do with either manufacturing or assembly is really pretty difficult. Is it a possibility for the future, I mean, of course anything is a possibility. The fact is that we are really assembling many of our products in Nigeria and that shows that Samsung is totally committed to the economy. But at the moment, we need to take small steps and for us, the real priority is to ensure that we can provide a high quality affordable products with two year service, which is what Samsung offers to the people of Nigeria. In the future, may be things will change, you know we innovate and we are very dynamic.
Samsung is prolific in the roll-out of products. What is the organisation doing in managing the e-waste that arises from the use of your products considering the dangers such wastes pose to health, safety and environment?
Let me make it clear that Samsung as a large global multinational company take our responsibility in terms of environmental issues extremely important. We are signatory to various international protocols. Unfortunately, I am probably not the right person to give you the details of our management of waste. What I can assure you is that even here in Nigeria, when it comes to the simple disposal of things such as old phones or batteries, we still engage third party agencies to do that for us and do it under a certification process. We comply with the regulatory requirements not only on international level but also on local levels and I know from personal experience in the past, during the disposal of our old demo mobile phones as well as batteries, we engaged third party agencies to ensure that they are disposed off in the right environment-correct manner.
Let us talk about Samsung Research and Development (R&D) Centres. You have 22 of such across the globe but none in Africa. What is your organisation doing in the area of establishing an R&D centre in the country so that products are manufactured to withstand the peculiar climate of the continent?
Let me begin by saying that we are already producing unique and numerous products tailor-designed and tailored-made for Africa. These are well known and known as our bond for Africa products and these extends to our mobile range as well as our consumer electronics range.
In terms of R&D, It takes place on an annual basis, in the next few months, we will have our team from Korea, visiting us and spending considerable amount of time on ground, traveling across Nigeria, gaining first time knowledge, experience and feedback in terms of what consumers want.
We have virtual R&D team that are not necessarily permanently based in Nigeria although of course, we have our own product managers and our own product specialists, they gather and collate information and feed it back. So, very soon, you will see the launch of Galaxy Grand, which is an exciting 5-inch smartphone, (Jiimson smartphone) in fact, the firsT smartphone that will be available in Nigeria. It is a typical example of market research, understanding the needs of the consumers and creating products that meet it. Chief Hero is the chief hero 1500, which is another product that was specifically designed for Nigeria and other parts of Africa based on inputs from consumers. It was created based on the requirements of consumers and affordable entry level. Consumers want robust, durable phones with good battery life and fast charging capability. They want the touch. When you gather all these information through your R&D team, you will be able build one product….as you said is built for Africa.
Theft of mobile phones has become a recurring decimal in Nigeria. Is there anyway Samsung can assist the customers such that, through the application of technology, stolen phones become useless?
We and our competitors are working very closely with the operators in Nigeria. There are various initiatives to try to reduce, if not entirely eliminate the abuse, either it is theft or other forms of abuse of mobile phone. Of course, all mobile phones carry IMEI, so there is a means of identifying products and taking the necessary action. Honestly, there is probably limited action that takes place within Nigeria; this is an area that could be improved upon. We will continue to work with the operators and other third parties to find out a way of managing this. In fact, at the moment, you talk about theft, the challenges in Nigeria continues to be grey. I want to emphasise this point because for your readers, I would like them to understand that the challenge with consumers buying grey. They are basically perpetuating illegitimate sales channel. Of course, people are very sensitive to pricing. Grey continues to be a big challenge in Nigeria; it continues to be a huge challenge for OEMs such as Samsung as well as our key partners, who are making efforts to try as much as possible to abide by the rules of the country in terms of importation rules or duty rules. I will urge Nigerians to reconsider buying grey because of N100 savings. In fact, in many cases, they don’t realise that at the later stage, the decision to buy grey has created a long term problem because there are warranty issues related to products that are illegitimately brought into the country.
The grey imports you talked about, are they not Samsung’s products?
There are two different grey products. On the one hand, there is the legitimate Samsung products made in a Samsung factory somewhere in the world, and they’ve been brought into Nigeria illegally. In other words, they are brought in by individuals who are avoiding paying the necessary duties and other charges that should be paid to the government of Nigeria. In the case of that grey products, individuals in many cases do not realise that they are buying grey, but there is a very simple way to check. At the time of buying your mobile phone, there is a call that can be made that can immediately tell the consumers whether they are buying a phone that is legitimately brought into the country or not. It is simple, there is a code that is made from the phone that will confirm whether the phone has been brought into the country legitimately.
The second is a greater problem. Of course when you become successful globally as we have become, many people want to try and ride on the waves of your success, so, if you go to any of the markets, may be it is Computer Village, Saka Tinubu or anywhere for that matter, you unfortunately will find many products that look like Samsung but that are not Samsung. Those are completely pirated products. They are not our products; they are not made by Samsung. Again, we ask people to do some checks. Generally, consumers must realise that they are buying an illegal pirated product. You will find that the grey pirate is significantly cheaper than the real products.
What amount of local content goes into your mobile devices by way of apps?
It is probably one of the fastest growing areas of our business at the moment. In our team, we have Bolade whose is fully dedicated to building relationship with local content developers and providers to ensure that we are able to provide both the app and content to the consumers. At the moment we have various initiatives – one of them being with Spinlet, which is a company where Nigerian music is pre-loaded onto the phone or alternatively, if you go to the Samsung store, you will find that they are increasing number of app both global, African and recently Nigerian applications available to consumers. It is a big growth area. I mean between social networking and the need for local content being available, it is the largest growth area we find driving the smartphone area because you essentially need the smartphone for your multi-media device.
Spinlet is about music. Are you not thinking of developing apps that will focus on education, health, agriculture and others? This may give you an edge on your competitors?
I will not disclose our business plan but we are working with a group of young mobile app developers in Nigeria and we are busy on some initiatives, which in the next few weeks, one of them will be announced. We are working, not only on app and content to high-end smartphone, but also with the introduction of our Book for Africa chief hero product, which is internet enabled, we are also looking at providing content and app for affordable phone users too.
The Federal Government, late last year, made available to develop the software industry N500million, leaving the balance of about $12million to sourced from individual and private organisations. Will Samsung support this fund?
Honestly, I don’t know. I will not be able to comment on that at the moment because I don’t have details.
What is your market share?
Well, no one wants to disclose market share but let us take a look at the developments taking place in Nigeria particularly in the past few years. First of all, I think without sounding arrogant, if you have to look at the premium smartphone space, everyone will agree that Samsung dominates the smartphone space. If you have to look at the success of many of our flagship products whether it’s the S3, which is world’s best selling phone, or the Note 2, which continues to gain huge popularity, especially in Nigeria where in December last year, we recorded fantastic sales or 10.1 tablet, it an area we dominate and it is an area you will continue to see innovation.
If you have to look at other smart phone areas, the Pocket, which is well known in Nigeria as well as across Africa has also become a major player. I think Nokia is finding it difficult to compete particularly in the smartphone arena. Blackberry has had some success in the past. It is about where the market is going and what the consumers want. It is not about Samsung. The market is going towards touch. So, the first thing is more and more people are becoming increasingly comfortable with the concept of basically using a touch phone. That is the first trend and if you look at who is the major player, of course you know it is Samsung. The issue is that consumers are moving more towards Android. Android age has become powerful engine that is really driving the smartphone space. And again, our alliance with Android and the fact that we use Android as our base for all our smartphones, positions us very well. If you look at the way the market is going right now, there is a two-camp forming; the first camp that continues to focus on low end entry level phone. Secondly, there is another camp that is focusing on entry level affordable premium smartphones. This is where Samsung chips in. We will continue to build some innovative smartphone, some affordable smartphones and we will also start introducing some exciting feature phones. Our strength to be honest is not in the ULC arena, there are other players that perform better there but if you start moving towards the messaging or feature phone arena. We are confident that we will continue to grow our business as it is at the moment because we have got consumers acceptance and in terms of market share, we are the dominant player within the smartphone arena.
Under your B2B years ago, you developed solutions for the South African Intelligence Agency. With the security challenge facing Nigeria, what level of partnership do you have with the Federal Government to address the spate of bombings across the country?
Again, I cannot comment on those particular solutions because I don’t have the details. What I can tell you is that in Samasung West Africa, we have dedicated B2B and D2D team; so because we have different units, we have the mobile unit, the IT, the consumer electronics and in many places B2B and B2G, opportunities extend across the business. We have now created one business unit; B2G business unit, which really drives many of our initiative into the government and the corporate sector.
