Having secured R150 million in funding from private investors, Onyx Connect said production of low-cost smartphones, tablets and other devices is set to commence in the first quarter of next year – making the company the first on the continent to manufacture smartphones from start to finish, Bloomberg reports.
The fact that the phones will be entirely produced in the country means that Onyx Connect will be able to eliminate import costs. In so doing, it says it will be able to produce a smartphone – that includes a camera, 1GB memory and operates on Google’s Android system – for about $30 (R410).
While the circuit-board designs and raw materials will be sourced from China, Onyx Connect sales director Andre van der Merwe says the rest of the process, from designing the phones to their assembly, will be done at its manufacturing hub in Johannesburg.
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This, the company says, is what differentiates Onyx Connect from competitors such as Sekoko Mobile, Zest Mobile and Mint Mobile.
“Through our international partners, Onyx Connect is set to become the first South African manufacturer and distributor of smartphones and tablets in South Africa, and we will be using all our combined experience to manufacture a high-end quality product,” the company says on its website.
“We know from experience that importing from China isn’t as straightforward as sending an email, paying your money and getting your goods. Due to local manufacture, all those issues will cease to exist – there will be no long turnaround of products, and issues due to international logistics and language barriers.”
Van der Merwe says the company is in talks with Google and Vodacom to manufacture phones, laptops “and possibly Android TV boxes”, with a longer-term plan to establish a distribution centre based in Ethiopia within the next 12 to 18 months, creating about 600 jobs in the process.
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Tech expert and World Wide Worx MD Arthur Goldstuck said the challenge that Onxy Connect faces is getting its products noticed in the market when it’s up against global multinationals who have humongous budgets to spend on marketing.
“The risk with such investments is that the company is entering an industry where your marketing budget will have to be massive and you are competing with companies that have the biggest research and development spending in the world,” he was quoted as saying, adding that keeping up with China’s economy of scale would be difficult to compete with.