There are many industry-shifting, epoch-making moments in the history of any technology. In the world of mobile phones, the evolution of the smartphone means such shifts have become the expectation rather than the exception.

In 2013, a quiet earthquake will rock the cellphone landscape in South Africa. In that year, for the first time, more smartphones will be sold in South Africa than “normal” or “feature” phones.

Of around 10 million phones expected to be sold that year, more than 6 million will be smartphones. And, given that there are already 6 million smartphones in use in South Africa, and a further 6 million are likely to be sold between now and the end of 2012, it will mean around half of cellphone users in the country will have one.

A smartphone is simply a mobile phone that runs on an operating system that can be modified or upgraded, and on which you can install applications developed without the involvement of the phone manufacturer. But within that definition lies a revolution. It means that half of all South Africans will have a pocket-sized computer in their hands.

Among other breathtaking shifts in communication, it also means more people will be using the Internet on their cellphones than on computers. And it means that global social networks will be a click away from half the country’s population. The world of apps – mini-applications designed for smartphones and tablet computers – is fast becoming the new world of the South African cellphone user.

That revolution already began a year ago.

In late 2009, a study showed that so few people living outside South African cities were using Internet browsers on their cellphones, the proportion of users could not be measured. But when the study was repeated at the end of 2010, more than a quarter of people living in South African towns were browsing the Internet on their phones.

This single statistic signals the revolution that is about to sweep Internet access throughout South Africa and the rest of Africa. The Mobility 2011 research project revealed that, of the total adult population living in cities and towns in South Africa, 33% were browsing the Internet on their phones. When this was split into urban and rural users, representing the differences between those in cities and in towns, the proportions were respectively 39% and 27%.

Lurking beneath this data is one of the most dramatic shifts of all: the arrival of email among rural users. While penetration among rural users was low – a mere 10% – the fact is that it was almost non-existent a year before. The process is now intensifying, to the extent that mobile email is about to become a mainstream tool across the population. And the mobile apps for Facebook, Twitter and various news, weather and sport services will follow in the wake of email, and then race ahead.

Feature phones aren’t going away. The camera, FM radio and games remain the most popular features used on phones throughout South Africa. But so much more will be possible, and the choice of phones will become more and more bewildering. At the beginning of October, Apple made an unlikely contribution to the complexity of choice. Until September 2011, their iconic iPhone had barely made a dent in the South African market. The reason was simple: at R6,000 upward, it cost too much. Limited supply also meant those who could afford it and wanted it were still opting for alternatives from BlackBerry, Samsung and HTC.

On 4 October, Apple invited the media to an event that was expected to be the unveiling of the all-new iPhone 5. However, new CEO Tim Cook fell short of expectations – announcing the iPhone 4S instead. It was an incremental upgrade, using the same body as the previous version. But he did make a quiet announcement with potentially far-reaching consequences: the old iPhone 4 would now retail at a mere $99 – the lowest price yet for a high-end smartphone. And still a very desirable smartphone!

If those phones reach South Africa in bulk, and the low price point remains intact, rival smartphone manufacturers may well experience the Apple effect that has made the iPhone the single most popular smartphone brand in the US. For now, the smartphone brand of choice in South Africa is the BlackBerry. The dominant overall phone brand in South Africa has always been Nokia but, in the past year, it has dropped to below 50% overall market share for the first time. Among smartphones, BlackBerry in recent years quickly became the phone of choice for executives who wanted email on the move. But that was still a niche market. Then, in 2010 and 2011, two more mini-revolutions occurred.

First, the deal offered by the BlackBerry Internet Service (BIS) – unlimited Internet access for R57 a month – made it wildly popular among mobile Internet users. And then teenagers began taking to the low-end version of the phone, the Curve, which could be obtained on a fairly basic contract package, or for less than R2,000 cash

The key to teenage uptake, though, was BlackBerry Messenger (BBM), a feature-rich instant messaging service. It was more compelling than Mxit, the home-grown instant messaging service that could be used on almost any cellphone. When feature phones entered the market, Mxit continued to dominate. But the arrival of BBM, along with cheap BIS and accessible smartphones, resulted in it sweeping the more privileged segments of the teenage market.

It wasn’t only about adoption; it was also about aspiration. In the Sunday Times Generation Next survey published in May, BlackBerry was named by the youth of South Africa as their coolest brand – supplanting Coca-Cola in the top spot. Equally important, the parents of these teenagers saw the huge advantages of being on BBM themselves. For them, the costly messaging service we know as SMS is all but history. In the coming year, however, new choices will have to be made. As the iPhone becomes accessible, and BlackBerry’s apparent failure to embrace the world of apps weighs heavily on the brand, the market will shift once again.

Let’s take a peek into the future of the smartphone. It’s not a prediction, but rather a series of insights based on what we can see in the market right now, and what we know will happen in the immediate future. During 2011 and early 2012, BlackBerry will remain the fastest growing cellphone brand in South Africa in 2011. The Mobility 2011 study indicated it had a potential of reaching 24% market share among cellphone users aged 16+ living in cities and towns. During the first half of 2011, BlackBerry lived up to these expectations, taking a stranglehold of the smartphone market. By June, it was making up as much as 70% of smartphone sales.

While its market share has slumped amid explosive growth of smartphones in Western markets, unit sales themselves remain strong, and it is maintaining a dazzling growth rate in the developing world. A much-ignored fact is this: among business users in the US, it remains the single most popular brand.
Nevertheless, poor strategic decisions by BlackBerry manufacturer Research in Motion means that the brand may well lose this momentum in 2012. But for at least the next year, it will remain the dominant smartphone brand in South Africa, and will still have significant market share into 2013. RIM is also getting cosy with Microsoft, so we may see a closer alliance there in the future. Clearly, local apps developers are avoiding BlackBerry at their peril.

Globally, phones using Google’s mobile operating system, Android, show both strongest growth and market leadership. This trend is likely to have an impact on all markets, giving Android a powerful market position in South Africa in the coming two years. Although no single brand of Android phone will dominate, its market strength will lie in its use by a combination of manufacturers like Samsung, HTC and Motorola, as well as brands like ZTE and Huawei – giants in technology, but still unknown in the local cellphone market. Google’s recent announcement that it was buying Motorola’s mobile business means that even that brand, written off in recent years as a contender, may emerge as a powerful “new” player in the Android market, 83 years after its founding.

Microsoft’s Windows Phone 7 operating system has minimal market presence in South Africa – and is not even fully functional on local networks. However, it is appearing on cutting edge phones from Samsung and HTC. Its next version, 7.5, codenamed Mango, is being rolled out, and will appear on many people’s phones before long.

More important, it has a sleeping giant waiting in the wings, namely Nokia. While the Finnish company appears to have surrendered the smartphone market, and its Symbian operating system is non-existent in global smartphone market share, it still has close to 50% cellphone market share in South Africa. In February this year, Nokia cut a deal with Microsoft to put Windows on its future phones, in effect abandoning Symbian.

As Nokia migrates to the Windows platform, and the mass market migrates to smartphones, brand loyalty is likely to kick in to give it substantial market share in South Africa. By the time Windows 8 arrives, late next year or early 2013, expect far more noise and competition from this direction.
By now it should be obvious. The future of the smartphone will arrive in 2013. But on the way to that future, expect many more revolutions.

By Arthur Goldstuck
Published in Playboy Magazine South Africa November 2011