India, the world’s second-largest smartphone market after China with approximately 750 million users, is facing challenges in acquiring new smartphone buyers due to the affordability issues faced by the average person in the country.
Instead of transitioning to a new smartphone, many Indian consumers opt to continue using their existing feature phones or upgrade to a new feature phone. This trend has led to an increase in feature phone shipments in the country, despite these devices being outdated and offering limited features compared to smartphones that cater to most computing needs of a typical user on-the-go.
Counterpoint’s data reveals that feature phone shipments in India experienced a 10% year-on-year growth last year, a significant improvement from the -31% decline seen in 2022, as existing feature phone users resist the transition to smartphones.
Within the feature phone market, 4G feature phone shipments in India grew to 25% in 2023 from 9% in 2022; however, the market is still dominated by 2G feature phones with a 75% share, according to Counterpoint.
Leading the 4G feature phone market in India is Reliance Jio, with a 27% share, followed by Itel and Lava at 24% and 18%, respectively, according to Counterpoint. Reliance Jio offers a variety of models in the segment, alongside specific tariff plans and access to digital services like Unified Payments Interface and apps such as JioCinema, JioTV, and WhatsApp to attract a larger audience.
Despite the success of 4G feature phones by Jio, smartphone adoption in the country has been hindered to a certain extent, as consumers can now access basic apps on feature phones, as noted by Tarun Pathak from Counterpoint.
Jio Eying a 5G Feature Phone to Capitalize on the Trend
Jio, India’s largest telecom player, is working on introducing a 5G feature phone to attract first-time smartphone buyers in the country, aiming to capitalize on the growing trend, as revealed exclusively to TechCrunch.
The telecom operator owned by Reliance Industries is planning to launch a 5G feature phone running Linux-based software KaiOS, as part of its lineup. Contract manufacturers Dixon Technologies and Neolync are currently in the process of prototyping the device.
While the official announcement is expected at Reliance’s upcoming annual general meeting in August, the device may not be immediately available to the masses, with pricing details still under consideration by Jio.
Jio is reported to be in early discussions with Qualcomm for the 5G feature phone, although details on other potential chipmakers involved in the device’s development are still being finalized.
Two individuals familiar with Jio’s plans also mentioned the company’s intention to launch a 5G Android tablet and a 5G smartphone in the near future.
Dixon Technologies and Neolync have not provided comments on the matter as of now.
Jio has a history of introducing successful feature phones in the past, starting with the JioPhone in 2017 and later iterations such as JioPhone 2 and Jio Bharat to cater to the feature phone market in India.
Why Are Millions of Indians Not Buying New Smartphones?
Despite the overall growth in India’s smartphone market, the entry-level segment has seen a decline in shipments, primarily attributed to the reluctance of feature phone users to switch to more affordable smartphones.
Market experts suggest that the significant number of feature phone users in the country, along with the relatively low smartphone penetration rate, are key factors hindering the transition to smartphones, particularly among older individuals and those with lower income levels.
A report by the Indian Council for Research on International Economic Relations and Prosus highlights that while smartphones in India are competitively priced globally, they may still be relatively less affordable for users in India due to income disparities.
Smartphone brands in India offer financing options to attract buyers, but these efforts have predominantly benefited existing smartphone users looking to upgrade their devices.
