India continues to buy more feature phones than smartphones, even in 2016

Smartphone shipments did not overtake feature phone shipments in India in 2016, despite expectations from industry trackers.


The trends are as follows. Globally, smartphone sales are slowing down because of reduction in demand. Fewer people are seeing the value proposition in upgrading their smartphones to a latest model. India is defying the global trend, because it is still an emerging market, and an increasing number of people are upgrading from a feature phone to a smartphone. There were multiple reports that high end smartphone sales were expected to grow in India.

 India continues to buy more feature phones than smartphones, even in 2016

The Xiaomi Mi5, Apple iPhone 6 Plus, LeEco Le Max 2, One Plus 3 and LG G5 running a benchmark

More than 70 percent of smartphone users were expected to upgrade to premium models, as they got comfortable with the ecosystems and how to use it. Even a Chinese smartphone manufacturer known to make affordable smartphones, Xiaomi, went premium. An increasing number of companies participated in the Make in India initiative, and local manufacturing boosted sales of smartphones in India.

2016 was the year when finally, smartphone shipments were poised to overtake feature phone shipments. Towards the end of the year, the estimates for smartphone shipments had to be corrected. It has emerged that 2016 will not be the year that feature phone shipments will overtake smartphone shipments after all. Feature phone shipments will be more than fifty per cent of phone shipments this year, according to a report in the Economic Times.

There are many reasons for this. Feature phones are not really dumb. They can be used to access music, reply to e-mails, navigate using apps, browse the web for news, and take photos. WhatsApp is only going to withdraw support for Nokia S40 and Symbian phones at the end of the year. Feature phones are small and cheap. They have battery life that have weeks of standby time. They provide all critical mobile services.

Commuters with their smartphones in a Mumbai local. Image: Reuters

Commuters with their smartphones in a Mumbai local. Image: Reuters

Consuming multimedia content and smartphone gaming are some of the few advantages that smartphones have to offer over feature phones. There is also speed of operation, but the question is, is it worth it to spend tens of thousands of rupees on a smartphone when a feature phone does most of the critical things anyway. A high definition flat screen television can be purchased at the price of an iPhone. Of course, you cannot carry around the flat-screen in your pocket, but this is the comparison and question being asked right now.

Another major problem is that after buying a smartphone, there is very little for Indians to do on it. There is not a rich ecosystem of quality local applications, in regional languages. Telecom operators, original equipment manufacturers, the telecom regulatory authority Trai and industry bodies all agree that there is a lack of local content, for the local population. This gives very little reason for many users across India to own a smartphone. Let's get one thing, not everyone is comfortable with English as a first language. Sure, there are phones offering user interfaces in local languages, but it will take some time before that goes mainstream.

Those who do own a smartphone, don't know what to do with it. Trai has taken steps to aimed at increasing the penetration of smart services over cell phones in rural areas. The validity period of internet packages have been extended to a year, to allow users to completely consume all the bandwidth they had paid for. The problem was that the previous limit of the validity of such packs to 90 days meant that users would purchase data packs, and most of it would remain unused. This meant that the data that users had paid for would go wasted, and that in turn meant the services were not considered affordable, or even very useful. There is a wide spread perception that these smart devices and services offer very low utility to most of the population.

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Indus OS, swipe right to translate, and swipe left to transliterate.

In fact, after Android, the most used smartphone OS in the market is the regional language based Indus OS. Indus OS has a higher market share than the operating systems from Apple or Microsoft. The company provides an operating system in Indian local languages, with smart translation and transliteration services. The usage of data on the Indus OS phones are also exceptionally high, with users expected to consume 1 GB every month as data tariff falls. The company hopes to attract ten crore users by 2018.

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Feature phones are here to stay. There may be some corrections in the market, smartphones may overtake and dominate shipments in the next few years. However, there will always be a demand for low cost communication devices that provides all the essential services. These are good as back up phones, can be picked up in emergency situations such as theft or loss, are functional as second phones, and easy to operate for seniors, and most importantly, are cheap. They can be used to provide healthcare, education, e-governance and banking services to the under served. Intelligent voice assistants or chatbots can potentially be deployed on feature phones as well. The newly announced Nokia 216 even has the hundred year old 3.5mm audio jack.

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