Will basic smartphones open up the developing world?

Nokia 6020

Nokia 6020 (Photo credit: Wikipedia)

As the latest smartphone becomes the de facto requirement for Mobile users in Europe and the US, it would be pretty easy to think the smartphone is the dominant phone throughout the world. Think again. While the UK and US struggle under mountains of debt and an uncertain economic future, parts of the developing world are making huge strides in connectivity and communication being driven by, you guessed it, the good old feature phone.

In India, mobile adoption is high in both towns and cities and offers a way of reaching parts of the country that are normally untouched. Indeed, Indians spend more time on their mobile device than on any other medium. Yes, this does mean opportunities for advertisers however examples of how mobile can advance peoples’ every days lives are plentiful. Recently, a funny telephone game has gone viral in Pakistan which allows illiterate and poorly-educated people to find out about jobs and telephone-based services. In Africa, Mobile devices are being used to warn people of floods, natural disasters and outbreaks of diseases that could affect both people and livestock. Kenya’s iCow offers farmers the opportunity to register their cow through a text and receive regular updates on gestation periods and when cows are most likely to mate. M-PESA, originally launched in Africa and newly launched in parts of India, gives the “unbanked” access to mobile banking services. This cheap, mass-communication device will continue to help people throughout the developing world.

It is the feature phone not the smartphone, that is driving this and global shipments of feature phones still far outstrip smartphones. The latest Android or Apple device is far too expensive for the majority of people in developing countries, and cheaper alternatives offer the basic services that people require. As mobile shipments continue to steer towards the developing world, we are likely to see companies turn their attention that way and come up with cheaper alternatives. Although there will always be an aspirational facet to owning a premium smartphone, and countries with burgeoning middle classes such as India and China will drive this, the large tech companies will need to produce cheaper alternatives to increase their uptake.

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M-Pesa arrives in India

English: A poster advertising the introduction...

English: A poster advertising the introduction of the mobile payment service M-Pesa in Tanzania (Photo credit: Wikipedia)

The Vodacom M-Pesa mobile banking service has been a huge success in many African countries and has recently launched in parts of India. After the huge success the M-Pesa service has had in Africa, it is hoped that the service will have the same impact in India. We take traditional banking services for granted in the West, but huge numbers of people in developing countries simply don’t have access. M-Pesa offers a way of empowering people and allows for the free flow of money in countries like Kenya, Tanzania and now India. M-Pesa adopts a simple, text-based approach to enable users to deposit and withdraw from specific M-Pesa outlets, carry out transfers, make payments at retail outlets and pay utility bills.

The M-Pesa service from Vodacom will target 700m people in India who currently don’t have access to banking services. It is being launched in partnership with ICICI Bank and will initially target 220m people in Eastern areas of India with the aim of reaching the 700m people in India with no access to banking services.

Whereas there is currently a ‘land grab’ in the UK for the potentially lucrative mobile payment market, with the likes of Google, PayPal, VISA, the newly launched WEVE and Retail outlets all jostling for position in what is likely to be a long and complicated process, more simple solutions in developing countries are likely to have more of an impact on peoples everyday lives. It may indeed be places like India and Africa that lead the way with mobile payment services, allowing for countries like the US and UK to learn from the process. Indeed, whereby mobile payments play such a crucial role in peoples lives, the issue of ‘trust’ around the security of the system is circumvented and progress is potentially quicker.

Marten Pieters, managing director and CEO of Vodafone India, stated

For millions of people in India, a mobile phone is a bank account, a front door to a micro-business or a lifeline to people in the remotest areas. Research shows that M-Pesa brings real benefits to users in their daily lives, saving three hours a week of their time and around $3 in money transfer costs – a significant amount to people in some areas.