Indian feature phone players such as Micromax, Lava, Intex and Karbonn, and also market leader Samsung, are likely expected to take the maximum hit. From the 4G device that the Reliance Jio Infocomm launched on Friday, many analysts and industry executives said.
Jio will start to supply its new phone effectively free of cost to users who are willingly ready to deposit Rs 1,500 with the company for three years. This, industry experts expect, will inturn force others to come up with many similar offers to minimise damage.
In fact, mainly most of these handset makers are likely believed to be working on their own low-cost 4G devices. Besides adding much more features to their basic phones, they said. They are now usually expected to form more partnerships with the telecom service providers to take on Jio.
While the industry anticipates great pressure on those current feature phone vendors. Several experts also see a better long-term for the overall benefit market. As the Jio phone would usually push more users towards smartphones. The likely expectation is that after having hooked to the Internet, users would likely to go for better experience. That should really boost the segment’s growth, they said.
The usual pace of smartphone growth has slowed over the last year or so. As many feature phone users just stayed away from upgrading due to several reasons such as affordability.
“This is a huge disruption … it will shake up the ecosystem …” said Vikas Jain, cofounder of Micromax Informatics. Mainly one of the country’s leading homebred handset makers.
Reliance Jio Impact
“We definitely cannot rule out the fact that this will greatly impact the featurephone industry. But very difficult to figure out the scale of the impact. Just for instance, we don’t know that whether that Rs 1,500 upfront fee is being financed,” he added.
Reliance Industries chairman Mukesh Ambani launched the much-long awaited 4G-enabled featurephone. It will now come bundled with life-long free voice calls and also data at a monthly recharge of Rs 153. In a usual bid to attract India’s massive 50 crore basic phone users.
The Rs 1,500 that the users will pay upfront is refundable after three years, but for that time being. The users cannot move to another operator or another phone as the single-SIM device is locked with Jio services.
With a 2.4-inch screen and also with alphanumeric keypad, JioPhone will be available. For many user testing in beta form from August 15 and also for pre-booking starts from August 24. The company said it will usually make available 5 million phones by every week. And also manufacture all units in India from the “last quarter of this year”.
Experts and many market players, however, are upbeat bascially on the longer-term impact.
Feature phone Players Brace For Buisness Shakeup
Rajan Mathews, director general of the Cellular Operators Association of India (COAI), usually expects the potential disruptive impact of the Jio’s low-priced 4G phone. To be much “far greater” on handset makers, who would now usually be under immense pressure.
Along to come up with similarly affordable 4G devices in order to remain in business. COAI represents Bharti Airtel, Idea Cellular, Vodafone India and Jio among others.
“It is one of those category which has seen least innovation over the past years. There will be a major significant impact on Indian players,” he added.
“This will also act as a long-term catalyst usually to the transition to smartphones,” said Pankaj Mohindroo. President of the Indian Cellular Association that mainly represents handset makers including Apple, Samsung and Intex.
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The “well-crafted” package will also be a catalyst for spreading 4G networks into the much deeper hinterland. And hence add to the basic adoption of 4G smartphones, he added.
“Going by the specs of the jiophone, I usually foresee it as a smartphone launched. At usually an extremely consumer friendly price, rather than a featurephone. So it could greatly bring consumers on this ‘featurephone’. But usually propel them to use smartphones later on,” Micromax’s Jain said.
His views were backed by many several industry insiders also including spokespeople from Oppo and Panasonic.