A home-grown cellphone brand, AG Mobile, which offers low-cost handsets into the mass market, is starting to challenge the big-name brands for dominance of the South African market.
AG Mobile, an “original design manufacturer” founded about 10 years ago by Anthony Goodman, estimates that it has captured almost 10% of the local market by volume, challenging brands such as ZTE and Vodacom with a range of low-cost feature phones and affordable smartphones.
The company has enjoyed strong growth since 2013, but has slowly been building a brand since 2006, says Goodman. It has used celebrity endorsements in particular to appeal to consumers.
A deal with Pep Stores, important for capturing a mass market of consumers, has helped propel take-up of the brand, as have deals with the network operators, he says. The company has a strong relationship with MTN and Cell C and is in talks with Vodacom. Other than Pep, it goes to market through retailers Foschini, Ackermans and Edcon (Edgars, CNA and Jet).
It sells its products across a number of other markets in Southern Africa, too, and is also entering the huge Nigerian market soon through Ringo. “Ringo is a well-established distributor with very good ties to the network operators,” says Goodman. “We are looking to build a proper business in Nigeria.”
It also intends selling phones through the online shopping site Jumia, which operates in 16 countries in Africa, including Nigeria. Next year, it plans to expand its focus to East Africa, starting in Kenya, with the United Arab Emirates in the Middle East also on the horizon.
Historically, AG Mobile, which designs its own phones in partnership with Taiwanese semiconductor giant MediaTek, has focused mainly on the feature-phone space. But in recent years, its Android-powered smartphone portfolio has expanded quickly. The ratio of feature phones to smartphones sold is now closer to 50-50, says Goodman.
Celebrities continue to be a key focus for the company. For example, it will soon release a smartphone “inspired by” hip-hop artist Cassper Nyovest to target the youth market he appeals to.
Other celebrities the company has worked with include Danny K, Kabelo Mabalane, DJ Fresh, Loyiso Bala, Lloyd Cele and Sophie Ndaba.
AG Mobile has half a dozen feature phones in its range, starting at R199 and going up to R349. Smart devices start at R499 for the Chaser on MTN and going up to the Ghost, which is a highly specced, 5,5-inch smartphone costing R5 999. Most of AG’s phones are dual-Sim devices. Its first LTE phones will be launched in South Africa in 2016.
“We typically spec the product higher than the competition,” says Goodman.
“AG doesn’t just take off-the-shelf product from China,” adds Dominique Friedl, regional director of corporate sales at partner MediaTek. “They are very involved in designing the products that are required for the African market.”
“Everything is done in South Africa, except the manufacturing,” says Goodman. “We have given some thought to local assembly, but there’s no real benefit to it. We are interested in job creation, but we can create jobs doing other things.”
Unlike bigger brands, AG Mobile tries to build consumer loyalty by providing extras in the box such as interchangeable covers, extra chargers and even, in some cases, over-the-ear headphones.
Goodman says the marketplace is “shifting” and opportunities are opening up for high-quality alternative brands to come into the marketplace and be successful. — © 2015 NewsCentral Media
