August 19, 2011
Qualcomm recently announced that they will establish an office location in Egypt, one of its top six regional markets, by the end of the year. A new focus on emerging markets, specifically those in Africa & the Middle East (AME), has driven the company’s latest expansions in the region. They want to increase usage and consumption of wireless mobile devices and services in AME, and the cornerstone of this plan is mobile innovation.
As an example, in July Qualcomm launched the “Qualcomm Powered” initiative in Saudi Arabia. This partnership brings together Saudi Arabian MNO Mobily, six handset manufacturers to start (including Huawei, HTC, Sony Ericsson, Alcatel, Acer and Samsung), and two local handset retail outlets to encourage smartphone uptake. Mobily has agreed to offer new smartphone customers free data usage for a limited time after their purchase, and handset manufacturers are making at least 25 handsets available under the initiative. Qualcomm is betting that smartphone uptake will increase mobile data usage and mobility among mobile users in the country (see Exhibit).
After establishing a wider market for its products and services by working with stakeholders to make 3G services and smartphones available to a greater number of Saudis, Qualcomm will identify 3G mobile products and services that people in the region will likely clamor for. Investments will then be made to find the people who can create and deliver these products and services, eventually establishing R&D centers where mobile innovation activity can proliferate. The goal is to create an “ecosystem” of mobile innovation development that benefits Qualcomm, MNOs, app developers, device manufacturers and consumers alike. Saudi Arabia is the testing ground for this initiative in AME, and if successful, “Qualcomm Powered” will be rolled out to Egypt and the UAE.
Exhibit: The Qualcomm Business Model
Unsurprisingly, Qualcomm intends to measure the impact of its mobile innovation strategy by tracking 3G device sales. Their reasoning is that if more 3G devices are being sold, it means more people will be using these devices to take advantage of 3G products and services. By providing investments that develop the talent to hone its products and services, Qualcomm hopes to shape the mobile technology industry in AME.
Just like Qualcomm, we believe that mobile innovation in AME will have a transformative effect on the sector in the next few years. Stakeholders that support the potential of mobile innovation are likely to be early winners. We predict that Qualcomm’s calculated push will help them gain ground in AME in large part because they're taking the steps necessary to jumpstart mobile innovation.
As we highlight in our latest Insider, “Three Steps to Accelerate Mobile Innovation in Africa and the Middle East,” mobile innovation will be driven by the development of new locations where mobile innovators can access resources that help them generate and refine new ideas for novel uses of mobile devices. Investments will help create and nurture the places and the people that are taking mobile innovation to the next level in Africa and the Middle East.
— Ronda Zelezny-Green, Associate Analyst
Africa & Middle East Mobile Demand Forecast
Forecasts published quarterly
Our Mobile Demand Forecast products provide complete pictures of demand trends for 25 geographical markets in Africa & Middle East. The Excel output includes five years of historical data and five years of market projections for metrics such as GDP, mobile penetration, subscriptions (by operator, type of package, technology), ARPS and total mobile service revenue (data and voice). The Forecasts are based on extensive field research and use a consistent methodology across all markets, aiming to capture the total spending, from an end-user perspective, on mobile communication services in each market.