It is no news that despite the economic contraction in recent times, the taste of an average Nigerian for smartphones has been on the increase. This trend has made several mobile phone manufacturers, especially from China target the Nigerian mobile phone market. This is evident in the influx of different brand in the Nigerian market space today.
The race to acquire the latest smartphone among Nigerians cut across all ages the reason for this trend has been attributed to several factors – this includes luxury, taste, ease of usage, price; for the tech-savvy, speed, storage space, camera capability, speaker, processor type, etc.
This week on Product review we take a look at the Nigerian Phone market and how different brands are playing out for market share and profitability.
The race for the latest smartphone by Nigerians
A visit to the popular, ever busy and bustling Computer Village in Ikeja shows that many Nigerians are lovers of smartphones. Nairametrics visited an outlet of the popular Slots within Computer Village. We saw several brands on display, with more customers at the stand display for Tecno smartphones.
In our survey, we wanted to know among the several brands which brand is the king of mobile phones, why and factors surrounding customer’s preference. Our team was exposed to players in the market ranging from Tecno, Infinix, Gionee, Nokia, Itel, ZTE, Innjoo, HTC, Wiko, Motorola, Solo on the conservative strata; and iPhone and Samsung on the luxury end.
All of these have a mark in the Nigeria phone arena, however, individual brand preference is influenced majorly by the consumers ‘pocket size’.
Further investigation confirmed that Tecno, Infinix, and Itel are subsidiaries of a Chinese holding company, Transsion Holdings was founded by George Zhu Zhaojiang, a Chinese businessman, and his business partners in July 2006. This was initially suggestive of the fact that they are all serviced by the same service centre, Carlcare.
A battle of prices and Taste
A chat with a lady who simply identified as Happiness described the sales of Infinix, Tecno, Itel as “pure water”. This suggests the three have the largest market share in the space. The price of these smartphones ranges from as little as N25,000 to as exorbitant as N450,000.
On enquiry about iPhone and Samsung smartphones, dealers couldn’t objectively pin a reason for customer’s preference over their conservative counterpart. However, it can be said majorly, that a customer will walk out with either a Samsung or iPhone based on his/her purchasing power. The least product on Samsung rack goes for N37,500 which is the Samsung Grand Prime Pro, on the other hand, the Samsung Galaxy Note 9 pegs at N318,900.
A quick walk to the iPhone stand reveals variant products with the company’s flagship, iPhone X which is worth N369,000 in the open market.
Why a sizeable number of end users settle for the duo is because of the quality attributed to the productivity achieved by either Samsung or iPhone. This is in terms of durability, finesse and glossy interface.
Information obtained from a store shows an average of 48 persons walks out with a Tecno product in hand per day. The reason hinges on affordability, followed by optimal functionality (camera quality, battery span, and operating system).
Tecno, Infinix, Gionee, Nokia, HTC, Motorola, and Innjoo are all major players in the mobile market; all striving to gain relevance. There are also concerns among Nigerians that the resultant effect is that the Nigerian market becomes a dumping ground for all brands of phone. Major regulatory agencies such as the Consumer protection council (CPC), Standard Organization of Nigeria (SON) must ensure that substandard brands do not find their way into the Nigerian market.
What consumers are saying
A poll conducted by Nairametrics on Twitter and Facebook revealed android as the preferred choice of most mobile phone users. A Twitter user, Offor Ora said he prefers android smartphones for their ability to share files easily, Google integration, the option of choosing from a wide variety, affordability, being customisable, and the back button and multi-window functionality. The other users who also commented via Twitter further confirm that android’s file sharing functionality over the iPhone.
Also, on Facebook, users’ opinion were the same. A Facebook user, Umar Inuwa said iPhone is unique, owning to his experience with the device.
Our poll conducted also revealed that of the total voters, android was most favoured with 57 percent, while iPhone claimed the remaining 43% of votes.
iPhone is unique
Android is everywhere
— Nairametrics (@Nairametrics) August 27, 2018
Going by the poll, Android is the winner of this week’s product review. This can be attributed to its affordability and file sharing capability. On the flip side manufacturers of Android smartphones should consider making devices that durable for consumers to get value for their money.
**Additional research was done by Ibukun Samuel and John Nwokolo
DEVALUATION: CBN updates website to official rate of N360/$1
The central bank of Nigeria has devalued its official exchange rate from N307/$1 to N360/$1.
Just as Nairametrics reported, the Central Bank of Nigeria has devalued its official exchange rate from N307/$1 to N360/$1. The apex bank has now reflected this change on its website signaling a confirmation. The bank is yet to issue a press release to this effect.
The CBN has now officially devalued by 15% moving from N307/$1 to N360/$1. Depreciation at the “market-determined” I&E window is 5% having moved from N360/$1 to N380/$1
Devaluation: Nairametrics reported yesterday that the Central Bank of Nigeria (CBN) sold dollars to banks at N380/$1 in a move signifying a devaluation of the currency. Banks trading at the Investor and Exporter (I&E) window bought dollars at N360/$1 from the CBN on Friday, March 20, 2020. The I&E window is the official market where forex is traded between banks, the CBN, foreign investors, and businesses. The central bank typically buys or sells in the market as part of its intervention program.
Nairametrics also got hold of a letter from the CBN to banks informing them of the new exchange rate for dollars flowing from the International Money Transfer Operators (IMTOs). According to the CBN, IMTOs will sell to banks at N376/$1 while banks will sell to the CBN at N377/$1. The CBN will sell to BDC’s at N378/$1 while the BDC’s will sell to end-users at “no more than” N380/$1.
Single Exchange Rate: A report yesterday also suggested that the CBN also planned to move to a single exchange rate policy for determining the price of the dollar. A senior central bank official who does not want to be identified, said, ‘Today we allowed the rate at the importer and exporters (I&E) window to adjust in response to market developments.’
The central bank has now made an apparent u-turn after it had initially that the “market fundamentals do not support naira devaluation at this time” detailing reasons why it did not need to devalue.
Falling oil price: Oil prices fell to under $20 on Friday before climbing back up to settle at $23 per barrel. Nigeria’s Bonny light trades at $26 while the benchmark Brent crude trades at $29 per barrel. In response to the crash in oil price, Nigeria’s announced a cut to its 2020 budget by N1.5 trillion as it faced the reality of a potential drop in its revenues. Nairametrics also has information that state governments are getting jittery about their ability to sustain salary payments as a reduction in their federal allocation “FAAC” is anticipated.
Investment options for salary earners
Investment options for the salary earners
#Investing #Entrepreneurs #Investment #Salary #Wages
Recently, one of the readers of my articles asked to know what investment options are open to salary earners. A salaried individual is like everyone else except that he or she has a fixed monthly income. This implies that their investments and expenses have to be managed strictly according to their fixed monthly income.
Since salary is assumed to be the only source of income for the salaried, it is advisable that such an individual fortify himself financially before investing so that adverse investment performance will not have untold effect on him and his family. Therefore, if you are a salaried prospective investor, you need to:
Get life insurance
Most families in Nigeria are single income families so much such that if anything bad happens to the income earner, the family gets shattered, at least financially. Again, given the risks inherent in capital market investments, it is only prudent to have a life insurance as a first step in one’s investment journey. It is very baffling to see many investors very deep into the market, yet they do not have life insurance.
[Read Also: Understanding the risks in bond investing]
Life insurance is and should be a basic part of any financial plan. Life insurance is a protection for loved ones against financial hardship arising from the death of a breadwinner. This is even more important today than ever before with high cost of funeral expenses, college education and medical bills. So, the first investment option for a salaried individual is to get a life insurance.
Prepare for financial emergencies
Life is full of surprises, emergencies do happen, jobs are lost without notices, and even good investment opportunities emerge sometimes suddenly. There is, therefore, the need for a cash reserve to help weather the financial storms and emergencies when they come calling.
Cash reserves do not only provide for emergencies, they also help to ensure that investments are not liquidated prematurely or at inopportune times to cover unexpected expenses. There are no hard and fast rules on what the exact amount of the required cash reserve should be, but most financial experts and planners will advise that an amount that equals about six months of living expenses be set aside.
So, as a salaried person, your next investment should be to have a cash reserve. A cash reserve should not necessarily be in a savings account or under the mattress; it could be in an interest-bearing money market account, money market mutual funds with low to zero luck-up period or another form of very liquid investment that is readily convertible to cash without loss of value.
[Read Also: Understanding the risks in bond investing]
Know your risk appetite
As a salaried and fixed income individual, your risk appetite is most likely going to be low as well as your risk tolerance, although your extended family profile could change all that. You need to know or understand your risk tolerance before you engage in any capital market investment.
Your risk tolerance will and should drive the type of investments you go into. Your risk tolerance depends on your psychological makeup, your current insurance coverage, presence or absence of cash reserve, family situation, and your age among others.
Talking about family situation, it is reasonable to think that a married individual whose children are still in school will be more risk averse than an unmarried person. On the other hand, older people have shorter investment time horizon within which to make up for any losses. the reason for this is because the older you get the less time you have to work to recoup on losses.
In that case the risk tolerance of an older man will be less than those for younger folks. Again, the more cash reserve and insurance coverage you have, the more your propensity to take risk. Now having known your risk tolerance based on the underlying factors, you can then define your investment objectives
[Read Also: Important tips on how to profit in a bearish market]
Set your Investment objectives/goals
Having met those essentials above, you are now ready for a serious investment plan or program. A good investment plan starts with investment objectives. Investment objectives are the force that determines what you invest in. Investment objectives range from capital preservation, to capital appreciation and constant income generation.
Capital preservation as an investment objective implies that you, the investor, aim at minimising the risk of loss by maintaining the purchasing power of your investment. So, if you are risk averse or you will need money from your investment soon for children’s education or for building a house or you are nearing retirement, this should be your objective.
Investors whose aims are to see their investment portfolios increase in real terms over a period of time are better suited for capital appreciation as an objective. This is better for investors that are more risk tolerant and those with more potential to recoup on losses along the way.
If you are already retired or nearing retirement, and therefore depend on your retirement plan supplemented by investment income, you need an investment that generates income rather than capital gains. In that case, your investment objective should be current income generation. It is always good to have investment goals stated in terms of risk and returns.
Decide on asset allocation
Armed with the knowledge of your risk appetite and investment objective, you are now ready to decide on what to invest in, and how much to invest in any asset class. This takes you to asset allocation decisions. Asset allocation involves dividing an investment portfolio among different asset classes based on an investor’s financial requirements, investment objectives and risk tolerance.
A right mix of asset classes in a portfolio provides an investor with the highest probability of meeting his/her investment objectives. Asset allocation is the most important investment decision an investor can make in a portfolio because it demonstrates an investor’s understanding of his or her risk preferences and return expectations.
It is good to strive for a diversified portfolio. Unfortunately, the Nigerian market does not provide a lot of asset classes for optimal diversification, but diversification can be achieved across sectors or industries within the few asset classes in the Nigerian stock market.
Decide on how to invest
There are different ways to invest in the capital market. You can invest directly by making the stock selections by yourself, thanks to the online stock trading platforms that abound the world over. This implies that you have what it takes to conduct the required research and analysis of the companies whose shares or stocks you wish to buy.
[Read Also: How I Would Invest My Mother’s Retirement Funds]
It also implies that you have what it takes to know when to sell or add to existing positions. Another method is to have someone “do the heavy lifting” for you. In this case, that someone, often times called fund manager or portfolio manager, does the research and analysis and selects shares that suit your investment preferences, investment objectives, risk tolerance and appetite as well as your investment time horizon.
This route is most suitable for investors that lack the knowledge and time for the required research and analysis. If you decide to go this route, mutual funds are the best bet for you.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Nigerian Breweries publishes names of over 100,000 shareholders who are yet to claim their dividends.
- 2020 FY Results: Sovereign Trust Insurance Plc records a 37% increase in profit after tax.
- CSCS Plc posts profit after tax of N6.93 billion in FY 2020
- BUA Cement Plc announces Board Meeting
- Infinity Trust Mortgage Bank Plc records a 60% increase in profit after tax in Q1 2021.