Africa’s Top Smartphone Seller Unsettled As Arrest, Lawsuits & Rivals Shake Its Grip

Transsion, the Chinese smartphone manufacturer that dominates Africa’s mobile market, finds itself in turbulent waters. Known as the “King of Africa” for its near 50% market share on the continent, Transsion is now grappling with a combination of legal battles, increased competition from fellow Chinese brands, and the recent detention of its chief financial officer, Xiao Yonghui.

The Shenzhen-based company announced that Xiao was detained by authorities in Dandong, northeastern China, as part of an ongoing investigation. Transsion has not provided details on the charges but has assured investors that the probe will not significantly impact daily operations.

“The company is not aware of the progress or conclusion of the investigation,” it stated in a filing with the Shanghai Stock Exchange last week, adding that its comprehensive governance structure should help it weather this storm.

However, the market reacted to the uncertainty, with Transsion’s shares falling nearly 5%, per the Financial Times, following the news of Xiao’s detention. The arrest comes at a challenging time for the company, as it fends off intensifying competition and patent lawsuits.

Challenges in Africa

Transsion, which built its empire selling affordable Tecno, Infinix, and Itel phones, has seen its grip on the African market start to loosen. The company’s market share in Africa dropped to 42% in the second quarter of 2024, down from 46% in the same period of 2023, according to data from Counterpoint Research.

This slip comes as rival Chinese brands Xiaomi, Oppo, Vivo, and Honor ramp up their efforts to capture market share in the region. These brands, long struggling to break into the premium smartphone segment globally, are now aggressively pursuing the midrange sector in Africa, historically Transsion’s stronghold.

Transsion’s strategy in Africa has relied on low-cost phones tailored to the local market. Priced between USD 110.00 and USD 120.00, its phones offer long battery life, greaseproof screens, and cameras designed for darker skin tones. These features helped the company grow in markets like Nigeria, Kenya, and Ethiopia. However, with Chinese competitors now offering similarly priced models, Transsion’s dominance is being challenged.

Legal Headwinds

Adding to its woes, Transsion is also facing potential financial strain from patent infringement lawsuits filed by major technology firms.

Notable tech firms, such as Qualcomm, have sued Transsion over unlicensed patent use. Philips is pursuing an intellectual property case in India, while Nokia is negotiating licensing agreements with the company.

While details on the suits remain limited, the legal pressure could result in expensive settlements or licensing fees, further eroding profitability. This comes at a critical juncture as the company expands beyond Africa.

Global Expansion as a Lifeline

Despite setbacks in Africa, Transsion’s global ambitions are gaining traction. The company has made significant inroads in emerging markets across Latin America, South Asia, and Eastern Europe. In the first half of 2024, Transsion’s shipments in Latin America skyrocketed by 276%, raising its market share from 2.2% to 7%. In Eastern Europe, Transsion’s market share hit nearly 17%, with Russia accounting for 81% of its sales in the region.

Transsion sold 94.9 million smartphones globally in 2023, making it the world’s fifth-largest smartphone vendor with an 8.3% market share. It is projected to ship over 100 million units by the end of 2024, thanks to its expansion in regions where low-cost devices remain in high demand.

The company’s ability to penetrate these fast-growing markets has allowed it to offset some of the pressure from its shrinking share in Africa. Still, as it faces legal challenges and new competitors, the question remains whether its global push will be enough to sustain its momentum.

Featured Image Credits: Chen Jian