South African handset manufacturer Onyx-Connect is launching a sub-$30 Android smartphone into the African market after reducing its costs by moving full production into the country.
In an attempt to eliminate importation costs and ease the customer repair processes, Onyx-Connect will begin full production of its Africa-made smartphones and tablets by April 2017. It will initially focus on the production of white label devices for operators in South Africa, with the launch of an Onyx branded line to follow later in the year.
Andre Van Der Merwe, sales director at Onyx-Connect, told Mobile World Live the company hoped to build its own brand, which will feature handsets with a range of specifications and high-end tablets, by connecting with first-time smartphone users in the country.
“Although people may want the latest flash smartphone the reality is, not everyone can afford one,” he said. “We’re going to give people their first 3G phone for under $30 and then when they move onto higher specification handsets we hope they will stick with us.”
As part of the sales strategy for its own devices the company has signed a deal with Apple-approved retailer iWorld, which Van Der Merwe said will sell the devices as its sole Android offering alongside its range of iPhones.
Ahead of full production of its Africa-made line, the company has been in talks with the country’s major network operators to supply white label handsets. Although Van Der Merwe stopped short of naming potential customers, in a recent article Bloomberg suggested Vodacom as one likely outlet. The company has also held discussions with distributors to supply devices to customers in other African countries.
Bringing manufacturing to Africa
Prior to manufacturing its own devices, Onyx-Connect had been distributing electronics made using parts largely sourced from China, incurring large importation fees.
Although several device manufacturers already have manufacturing facilities in Africa, Onyx-Connect claims to be the only one that will create all aspects of the device on the continent and it holds a Google Mobile Application Distribution agreement for Android, which is needed to distribute Google’s suite of mobile apps.
Revenues from its software assets mean it is able to part-fund the cost of the hardware, making up for any additional costs that may be incurred from manufacturing in Africa rather than China.
By producing all elements of the new devices themselves, Van Der Merwe said the company is able to both limit import costs and tailor handsets to the local market, providing a ‘cleaner’ version of Android than many rival devices being supplied to African customers.
“Devices that are imported often come with native applications that most African consumers will never use and can never get rid of,” he added. “By providing a clean version, we enable our (operator) customers to add the applications their customers need.”
Its first Africa-made handsets are expected to be available by April.