Wednesday, November 16, 2011

Is Mxit a sign that the future of mobile innovation is in Africa?

Innovation often happens on the edges.  This can mean at the edges of an industry, like telecom, or the edges of a place, like Silicon Valley.

But it can also mean the edge of geography and culture and technological development.  So when we think about innovation in SMS or internet-based communication, maybe we should be looking away from California and London towards places like South Africa, where Mxit has melded messaging, the internet and a social network into a dominant offering.

From a column at Memeburn on Africa turning the tech world “upside down:”

These innovative solutions are based on needs locally, many of them due to budgetary constraints. Some of them due to cultural idiosyncrasies. Often times people from the West can’t imagine (nor create) the solutions needed in emerging markets. They don’t have the context nor is the “mobile first” paradigm understood.

The author, Erik Hersman, goes on to discuss the idea that Africans often have to work with a given technology, such as SMS, longer due to financial constraints.  This leads to innovation when others have moved on to the hot new thing.

Mxit is an over-the-top (OTT) player in that it uses the internet to relay messages from mobile phones to chat rooms, computers and other phones.  It has more members in South Africa than Facebook, boasts 45 million registered users worldwide, and processes 750 million messages a day. But it is popular mostly because it is cheap and flexible, the social media of choice of 30 percent of South African youth.  (For a 2007 analysis about why it works both technically and financially, go to this Telco 2.0 anaylsis.) 

It was also recently sold, and the new CEO, Alan Knott-Craig has a strong vision for the company, again from Memeburn:
“We are a communications platform, that what we are. We need to stop doing everything else and do what we do best and that’s communication,” he says.
“We are not going to make the mistake companies like Facebook have made, by trying to be everything to everyone. We are just going to be a switch with a wallet component that allows people to hook in via an API.”

Mxit just launched a partnership with browser-developer Opera to feature the Opera mini browser to Mxit users and for Opera users to get one-click access to Mxit – a deep integration that many OTT players can only dream of.   

This comes as the company makes a larger push into smartphones, perhaps as its business model – built on low income users on cheap feature phones – is about to play itself out?


  1. How MXit handles the transition to smartphones will be critical for their long-term prospects. They already face stiff competition from BlackBerry and have some catching up to do. On the other hand, their existing business model still has plenty of mileage in the rest of Africa and parts of southeast Asia, so they have time to work it out.

  2. Is BlackBerry stiff competition for anyone these days? Or maybe their troubles are overstated, especially in South Africa, where they seem entrenched.

    I did see an interesting analysis that Mxit is not going to see much growth anymore but would the business model allow for a long period of profitability or would it crash? I agree that it has plenty of years of profitability.

  3. Quite right. South Africa is one of the very few markets where BlackBerry is bigger than both Android and iOS. has the numbers...