Industry
Jio, Google will have to sweeten pot to sell JioPhone Next
Summary
- But analysts are sceptical about aim to sell 4G devices to feature phone users
- Firms claim the device will support the entire suite of applications from both Google and Jio
JioPhone Next, the promised ultra-cheap, “built for India" smartphone being developed by Google and Reliance Jio, will hit the shops on 10 September, the companies announced on Thursday. They claim the device will support the entire suite of applications from both Google and Jio, as well as Google Play Store, which offers access to more Android apps.
“An ultra-affordable 4G smartphone is essential to make India ‘2G-mukt’. Last year, Sundar (Google CEO Sundar Pichai) and I had talked about Google and Jio co-developing a next-generation, feature-rich, but extremely affordable smartphone, aimed at providing first-time internet access for 2G users," Mukesh Ambani, chairman and MD of Reliance Industries Ltd, the parent company, told Jio’s annual general meeting.
Pichai added: “Our teams have optimized a version of our Android OS especially for this device. It will offer language and translation features, a great camera and support for the latest Android updates. It is built for India and it will open up new possibilities for millions of new users who will experience the internet for the first time."
But all of this, analysts said, may not be enough.
The JioPhone Next is part of a ₹75,000 crore investment Google made into Jio Platforms Pvt. Ltd last year, and aims to convert the country’s 400 million feature phone user-base into smartphone users. While industry estimates say that 50% of India’s mobile phone market still remains in the sub- ₹10,000 segment, lack of good options here have kept many users from upgrading from their feature phones.
“It’s not easy to make a phone that’s good quality and still sell it at around ₹4,000-4,500. That’s why we have seen brands like Samsung, Xiaomi, etc., vacating that segment," said Navkendar Singh, research director at the International Data Corporation (IDC), India.
“If this JioPhone goes above ₹3,000-5,000, then it will not meet the original objective, I feel. The overarching objective is to bring 250-300 million out of the 400 million-odd feature phone users to smartphones," he said.
Singh and other experts say that feature phone users spend less than ₹1,200 on handsets, and ₹40-50 on voice calls per month. Those phones are long-lasting, and there is no precedence for such users making the jump to a ₹3,500-4,000-handset. “It has not happened even with the (original) JioPhone," said Singh.
Tarun Pathak, research director at Counterpoint Research, said that Jio could sweeten the pot by bundling other services, but he too said pricing will remain important.
“The software features and other things we are considering here are post-purchase behaviour. Only when you buy a JioPhone Next will you come to know whether the software optimization is working, and how the experience is on its low end hardware, limited memory, etc," he added.
Pathak said Jio’s bundling ability will play a big role. The fact that the company already controls the telecom infrastructure and has content assets should help improve the value proposition.
