Phone Manufacturers Abandon Nigerian Factory Plans

There are indications that some foreign original equipment manufacturers of mobile phones have abandoned their plans to establish factories in Nigeria citing entry barriers into the market as the problem.

Despite experiencing market acceptability for their products and having growth prospects in Africa’s largest market for mobile devices, some of them have developed cold feet towards the establishment of the production centres in the country.

Makers of major mobile phone brands like Tecno, Samsung, Nokia, Motorola, and Blackberry had in the past indicated interest in establishing production plants and had promised to create millions of jobs. But findings by our correspondent showed that siting manufacturing facilities in Nigeria was no longer on the table for the OEMs.

Findings also revealed that the market shares of some of the OEMs had been eroded by the emergence of cheaper phone brands.

Statistics from Euromonitor showed that mobile phone brands owned by Transsion Holdings, maker of Tecno, Itel and Infinix, have the highest market share in the country.

The 2018 report indicated that Tecno had 41 per cent market share, Itel had 25.8 per cent market share while Infinix ranks fourth with 8.5 per cent market share.

According to the data, Nokia ranks third in the Nigerian market with 8.7 per cent market share while Samsung devices are the fifth fast-selling brand with 7.6 per cent market share.

Contrary to the market reality of the past when OEMs tinkered with the idea of setting up phone manufacturing plants in Nigeria, the possibility appeared to have become very slim if not obliterated.

For instance, the Chief Executive Officer, Samsung Electronics Africa, Mr Sung Yoon, during a visit to Lagos last year, stated that the company would not establish a factory in Nigeria due to its low market share, infrastructural deficit and grey market in the country.

He said the company had manufacturing plants in Vietnam, China, South Africa and Korea, adding that producing mobile devices required over 400 components that had to be imported.

Source: Punch