Influx of refurbished smartphones, grey market pushing OEMs to shelve growth plans
…Nokia, others mull right-sizing to shed operating costs
In ability of several governments’ in developing economies mainly in Africa to come up with strong policies that will restrict the influx of refurbished smartphones and grey market are pushing leading smartphone producers and Original Equipment Manufacturers (OEMs) to shelve expansion plans.
This is observed from the position of major OEMs like Samsung, Tecno, Nokia and others have shelved their earlier approved plans to open new plants in Africa to feed the market as digital inclusion powered by smartphones deepen.
Checks by our correspondent across leading smartphone markets in Nigeria showed that refurbished smartphones far outnumber new phones and their prices are far cheaper and pocket friendly with almost the level of service to buyers.
Key consideration of many Nigerians who prefer refurbished phones which mainly come for Britain and China is cheap price even though the phones are known to be very close to their end of life.
Besides, in Nigeria, there are strong indication that the telecoms regulator, the Nigerian Communications Commission (NCC), seems to be powerless in presence of refurbished phones in the Nigerian market because there is nothing to show that the high volume of refurbished smartphones passed form of type approval, a compulsory test conducted by the agency before any device is allowed entry into the market.
Already, the serial drop in appetite for brand new phones has started taking tolls on the decision of leading OEMs as some are now on the brink of right-sizing their staff strength as way of cost-saving to remain in business after discovering that sales have steadied on the negative over time against market projections.
For example, Finnish device manufacturing giant, Nokia says it plans to lay off around 350 of its 6,000 employees in Finland this year as part of a cost-savings programme designed to shed €700 million from its operating and production expenditure by end-2020.
Giving the hint at the ongoing MWC in Barcelona, Spain, Heikki Norta, Senior Vice President, Corporate Strategy, Corporate Development of Nokia Corporation and Mark Durrant, Director, Communications Nokia Corporation, explained that consultations with employee representatives began since 22 January and the job cuts will impact all of Nokia’s business groups and support functions.
Tommi Uitto, Nokia’s country manager for Finland, said “Our industry is one where a constant focus on costs is vital and the planned transformation measures are essential to secure Nokia’s long-term competitiveness. Such decisions are not easy, but we will do our utmost to support our personnel during the change process.”
Nokia also made it clear that its global restructuring and cost reduction programme also covers other countries, though “the schedules and measures will vary in accordance with local prevailing laws and practices.”
