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transsion dominates the african mobile phone market through brands such as tecno

author/xiao yu

editor/liu yukun

transsion holdings, the "king of mobile phones in africa", recently announced that its cfo xiao yonghui has been detained. the financial times of the united kingdom pointed out that transsion is currently struggling to withstand increasingly fierce competition from domestic rivals and allegations of patent infringement, and the detention of senior executives is undoubtedly adding insult to injury.

transsion shares fell nearly 5% on monday after the company announced xiao’s detention over the weekend. the company did not elaborate on why xiao was under investigation but said his detention would not have any significant impact on its normal operations.

"the king of african cell phones" is popular in latin america

transsion has earned the title of "africa's mobile phone king" for dominating the african smartphone market. transsion started in the nigerian market, and its founder and ceo zhu zhaojiang began selling feature phones in backpacks in 2006.

however, as domestic chinese mobile phone rivals erode its market share in africa and big technology companies file potentially costly patent lawsuits, transsion is increasingly eyeing other markets in the asia-pacific region, eastern europe and latin america.

data from research firm counterpoint shows that in the first half of 2024, transsion sold 3.75 million mobile phones in latin american countries, a year-on-year increase of 276%. in the second quarter of this year, the company's market share in latin america rose to 7% from 2.2% in the same period of 2023.

“obviously, they see an opportunity to move into markets where smartphone penetration is well below average. that puts them in a pretty good market position,” said francisco jeronimo, vice president of data and analytics at research group idc.

global smartphone market share of transsion and other brands

“transsion is becoming increasingly popular in latin america,” said andres rodriguez, ceo of latin american smartphone distributor totalynk. he added that transsion phones are particularly popular among “generation z and young millennials.”

according to counterpoint, transsion became the world's sixth-largest smartphone supplier in the second quarter of 2024, with a market share of 8.3%. transsion does not sell phones in north america, western europe or china.

in the mid-2000s, zhu zhaojiang flew to lagos, nigeria to test market demand for chinese feature phones, honing his low-cost product strategy that met local needs.

data from counterpoint shows that transsion smartphones are currently priced between $110 and $120, far lower than the average selling price of apple's iphone, which is $900. this price difference has greatly increased the appeal of transsion's tecno, infinix and itel brands.

transsion has also incorporated features tailored for the african market: its phones have long battery life to cope with unstable electricity supplies, grease-resistant screens for humid climates, and cameras designed for darker skin tones.

"we have been innovating and localizing to discover market demands overlooked by our peers," zhu zhaojiang said in a rare interview in 2019.

african markets are on the defensive

however, data from counterpoint shows that in the second quarter of this year, transsion's share of the african smartphone market fell to 42%, down from 46% in the same period of 2023.

“transsion is on the defensive,” said yang wang, senior analyst at counterpoint. “especially in the last two or three quarters, we have started to see chinese domestic rivals xiaomi, oppo, vivo and honor start to focus on the african market. these chinese brands are not doing well in the high-end market, so they are looking for the mid-range market that suits them.”

transsion phones are priced much lower than apple

transsion's revenue is still growing rapidly. in the year ending april this year, transsion's revenue reached 71.8 billion yuan (about $10 billion), an increase of 48% from the previous 12 months.

transsion has succeeded in markets that are difficult for western rivals to crack. in the first quarter of this year, russia accounted for 81% of transsion's sales in central and eastern europe, said geronimo, vice president of idc analysis. according to counterpoint data, transsion sold 5.1 million smartphones in eastern europe (including russia) in the first half of 2024, a year-on-year increase of 162%.

intellectual property litigation becomes a thorny issue

however, transsion's global expansion may be threatened by overseas intellectual property lawsuits.

qualcomm and other large technology companies have filed lawsuits against transsion, accusing it of patent infringement for failing to reach a patent licensing agreement. philips is suing transsion in india for patent infringement. other companies, such as nokia, are trying to negotiate a licensing agreement with transsion.

richard vary, a partner at bird & bird, the law firm hired by nokia as outside counsel to help with its patent dispute with transsion, warned that transsion could be hampered by future court battles if it doesn’t agree to a licensing deal with the patent holder.

"it really comes down to when transsion is willing to sit down at the negotiating table and get a patent license, but before someone gets an injunction against it in a major market," farley said.

in 2022, nokia won the patent lawsuit, causing oppo's smartphones to be removed from the shelves in germany. this year, oppo reached a settlement agreement with nokia and paid back the technology royalties, allowing its mobile phones to re-enter the german market.

industry analysts pointed out that being forced into a licensing deal could make it harder for transsion to undercut rivals on price. "transsion's success is largely due to its ability to keep phone prices low," said yang wang, a senior analyst at counterpoint. "the patent dispute could hamper transsion's product strategy and ambitions outside africa."

in july this year, when asked about the intellectual property dispute, transsion told the financial times that the company "respects the intellectual property rights of third parties" and is willing to reach a licensing agreement with patent holders through "friendly negotiations."

as of press time, transsion has not commented on this.

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