JioPhone launch: For Mukesh Ambani, market is big enough to target feature phone users, say analysts

New Delhi: With Mukesh Ambani-led Reliance Industries Ltd (RIL) announcing the launch of an affordable ‘intelligent’ JioPhone, industry analysts have given the thumbs up to the move, saying this will bring a new era of innovation for the feature phone market in the country. While the smartphone industry is undergoing a massive revolution, the feature phone market has not seen many innovations as internet connectivity grew from 2G to 4G. “JioPhone is a move to reach out to the next 100 million users. With an installed base of 400 million feature phones in India, the market is big enough for Jio to target feature phone users with disruptive offers and an effective price of Rs ‘zero’ for a device,” Tarun Pathak, Senior Analyst, Mobile Devices and Ecosystems at Counterpoint Research, told IANS. “The feature phone segment is still very active in India and close to half a billion such handsets will be sold in the next five years,” he added. [caption id=“attachment_3840777” align=“alignleft” width=“380”]  Reuters[/caption] The details are yet to emerge but the phone appears to have a 2.4 QVGA resolution, near-field connectivity (NFC) technology, four-way navigation, alphanumeric keyboard, SD card slot, a microphone and a speaker, headphone jack and FM Radio, among other specifications. For Navkendar Singh, Senior Research Manager at IDC India, JioPhone will have a significant impact on the 2G feature phone market in the country. “Till now, a feature phone user is not migrating to smartphone due to affordability, device quality (read, battery life, ruggedness, etc.) and general ease of using the smartphone,” Singh told IANS. “With the JioPhone, these users will get a taste of data and video which they have not been able to till now since there was no offering at such price points. Subsequently, these users will be expected to migrate to smartphones in the next two-three years,” he added. JioPhone is also going to completely change the feature phone market for other players in the segment, feel experts. “The replacement cycle of feature phones was normally four years till date but JioPhone will now shorten that cycle and you will expect a lot of people to upgrade to the new VOLTE-enabled JioPhone,” Pathak said. According to Counterpoint Research, the feature phone shipments in India will be around 130 million this year. Since the base for 4G feature phones is somewhat around 400 million and even if one-third of these users plan to upgrade, this will lead to 133-150 million new user-opportunity in the short-term period, Pathak predicted. The pre-booking for JioPhone will start from 24 August and it will be given away on a first-come-first-served basis. It will be available for all from September. JioPhone will offer free voice calls and SMS to customers. For 4G data, customers need to pay Rs 153 per month. The phone is pre-loaded with applications like Jio Cinema, Jio Music and others. For Narinder Kumar, an analyst at Cybermedia Research, the “world’s cheapest feature phone” will certainly impact the current market of 2G handsets as well as the entry-level smartphone segment. “Initially, JioPhone holds greater potential for feature phones moving end of life in the near future,” Kumar told IANS. For Anshul Gupta, Research Director at Gartner, the move is going to create a certain disruption at a time when data consumption is on the rise and JioPhone will help create more customer base amid the ongoing data tariff war.