Hardware. Unexplored Potential

Kenya has a technology sector that has been accelerating over the last four odd years. We have had many startups move from oblivion into the mainstream and a lot of emphasis has been given to the new cutting edge sphere’s of technology. Some of these are:

  • Cloud Computing
  • Mobile Apps
  • Mobile Platforms
My problem? It’s great to have innovation around all these sectors, but the infrastructure required to run them will always be a source of money. Let me give a simple example. It’s not ‘cool’ to work on TFT Screens etc. However, an expertise in building TFT screens/CRT’s etc will eventually lead to the expertise required to build low power devices for devices such as the iPhone. Much as Samsung competes with Apple, Apple was one of their single largest customers last fiscal, contributing 5.7B USD to Samsung’s books (roughly 4%). Much as it’s good for Kenya to be leading in the mobile arena, it’s really unfortunate that we have not began innovating around the hardware side.
The ‘Kabambe’
The ‘Kabambe’ was a simple phone with only the most basic features that was developed by ZTE Technologies. It’ had a basic LCD screen with horrible visibility during the day. This was five years ago. Currently, ZTE are now OEM’s for Android. They have manufactured many high end android devices and they are one of the largest providers of hardware for Orange, both with regards to the devices and BTS infrastructure.
The ‘ZTE 225′ or Kabambe, as it was known in Kenya
How does Hardware Innovation Come in?
Huawei started off by running, then eventually building PBX switches targeted at SMEs. This eventually gave them enough legroom to launch their first digital switch (which at the time had the largest switching capacity in China). They continued expanding and eventually were able to start offering CDMA/GSM/UMTS, in roughly 1997.
This is similar to Nokia/Siemens/Ericsson/Motorola etc. Most of the companies that traditionally provided back infrastructure for PBX systems moved into the mobile space (it was only natural, fixed line communication was a dying business). Thing is, the skill-set required to launch and maintain a good GSM network works very closely with the skill-set required to make a good mobile phone (issues around network stability, power utilization etc). It was rare, at the time, to find a mobile phone manufacturer who did not deal in telecommunications infrastructure. The eventual entrants into the space (HP/Samsung/Acer/Palm etc) all had a previous background in electronic devices. We never really had a startup that was able to penetrate the smartphone market without either a telecommunications infrastructure background or a computing device background. As smartphones picked up, the manufacturers of said computing devices (HP/Samsung/Palm etc), grew at a higher rate as the devices took a a more end-user focused orientation which the companies had better experience in.
If you cycle back to ZTE & Huawei, they are now making amazing devices (both affordable and useable e.g.
The IDEOS, a USD 100 smartphone from Huawei
The ZTE Blade, a USD 150 Smartphone, available in Kenya
The Point?
In our Vision 2030 statement BPO is one of the pillars of the new economy. I believe (personally) that this is a waste of time primarily because one of the pillars of our economic growth is based on us maintaining low income rates for skilled labour (if we become expensive, we lose out), which is a conjecture, really.  I like the direction that has been taken with regards to software, but I believe more emphasis should be placed on hardware in Kenya. We will never be able to produce affordable phones before we are able to produce affordable computer monitors (the materials required are the same and the monitors reduce the cost of the raw materials in the economy). Why should we produce affordable phones? Because no matter how much software we develop, the customer will need to have a device to use the software/consume our media. Why can’t we be the ones manufacturing the devices? That will also give the local ecosystem an edge with regards to software development (the hardware devices will need to have some form of software be it from Microsoft/Google etc). If you think about it, Apple has expertise in both hardware & software and that’s what makes it a great company. All the great software companies today are acquiring a hardware skillset (Google/Microsoft/Oracle etc)… It’s time Kenya started thinking in the same direction…

2 thoughts on “Hardware. Unexplored Potential”

  1. Interesting insight. Some sort of hardware tweaking needs to be done to solve the last mile distribution & connectivity problem as well as creating innovative pieces of technology.

    The issue we have in Kenya and many African and developing countries is no longer of the digital divide but that of the connected middle class and disconnected class who mainly live in rural areas. Optimising hardware may just well close this gap.

    1. Tweaking is one thing. Manufacture is another. We can do manufacture, we just don’t try. The government should form four corporations similar to Huawei/ZTE and have them compete amongst themselves for telco business. And a localized phone company. We will be behind, but it only takes 10 years to catch up, as all these companies have proven… We can, if properly efficient, be the manufacturing destination of choice for semiconductors (which is a good type of BPO, as it has higher margins and increased foreign currency inflows). We also can cut out the customer at some point, as Samsung has with Apple. Used the scale provided by Apple to start it’s own mobile phone division. Samsung alone has revenues higher than Kenya’s GDP…

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