India, the world’s second-largest smartphone market after China with round 750 million customers, is struggling to get new smartphone consumers, as the typical individual within the nation finds it onerous to afford a brand-new smartphone.
As a substitute of switching to a brand new smartphone, thousands and thousands of Indian shoppers desire to proceed with their current characteristic telephones or solely improve to a brand new characteristic telephone. The latter has resulted in development in characteristic telephone shipments within the nation regardless of these telephones being fairly old style and having only a handful of options in comparison with smartphones, which assist clear up most on-the-go computing necessities for a typical purchaser.
In response to information shared by market analyst agency Counterpoint, characteristic telephone shipments in India noticed 10% year-on-year development final yr, up from -31% in 2022. This development comes as current characteristic telephone consumers resist from selecting a brand new smartphone.
Of the overall characteristic telephone market, 4G characteristic telephone shipments in India grew to 25% in 2023 from 9% in 2022. Nevertheless, 2G characteristic telephones nonetheless dominate the Indian market, with a 75% share, per Counterpoint.
Indian telecom big Reliance Jio leads the 4G characteristic telephone market, with a share of 27%, adopted by Transsion Holdings-owned Itel and Indian telephone maker Lava at 24% and 18%, respectively, in keeping with Counterpoint. The telecom operator presents a spread of fashions within the phase together with devoted tariff plans and entry to providers digital providers together with the nation’s real-time fee system Unified Funds Interface and apps comparable to JioCinema, JioTV and WhatsApp to draw the lots.
Nevertheless, Tarun Pathak, analysis director for gadgets and ecosystems at Counterpoint, instructed TechCrunch that the 4G characteristic telephones from Jio have hindered smartphone adoption within the nation to a sure extent “because the shoppers are actually capable of get primary apps on characteristic telephones themselves.”
Jio eying a 5G characteristic telephone to capitalize on the pattern
Jio, the greatest telecom participant in India by way of its subscriber base and revenues, is quietly planning a 5G characteristic telephone as manufacturers face challenges in attracting first-time smartphone consumers within the South Asian market, TechCrunch has solely realized.
The telecom operator owned by the Indian conglomerate Reliance Industries has been promoting characteristic telephones for years and progressively moved to smartphones with Google in 2021. However its first smartphone was too expensive for its mediocre specs and didn’t assist transfer the needle. Now, Jio sees characteristic telephones because the strongest weapon it has to get telephones into as many arms in India as doable.
Jio’s 5G characteristic telephone will run Linux-based software program KaiOS, which already powers the telco’s current characteristic telephone vary. Contract producers Dixon Applied sciences and Neolync are presently prototyping the handset, sources stated.
The telephone could be introduced at Reliance’s forthcoming annual common assembly, which is predicted in August, although it isn’t prone to be prepared for the mass market anytime quickly, in keeping with the sources. The telephone’s pricing can be among the many questions that Jio is but to find out.
Sources conversant in the matter instructed TechCrunch that the Mumbai-based telco is in preliminary talks with Qualcomm for the early model of its 5G characteristic telephone. Nevertheless, different chipmakers could also be concerned within the remaining machine, because the discussions are nonetheless on on its improvement.
Qualcomm denied its participation in discussions with Jio when TechCrunch reached out this week. A Reliance Industries spokesperson declined to remark.
Alongside the brand new 5G characteristic telephone, Jio plans to launch its 5G Android pill and a 5G smartphone this yr, two folks conversant in the telco’s plans instructed TechCrunch.
Dixon Applied sciences and Neolync didn’t reply to requests for remark.
Till now, Jio has a 4G line of gadgets, which incorporates the JioPhone Subsequent as its first Android smartphone. The telco, nonetheless, is trying to improve its portfolio to 5G gadgets, because it goals to develop its telecom revenues and dealing on monetizing 5G connectivity. Jio, together with rivals Airtel and Vi, not too long ago hiked tariffs within the nation to spice up their subscription revenues. The operator can be anticipated to spin off from Reliance and record as a public firm on Indian inventory exchanges at a valuation of $112 billion as early as subsequent yr.
Jio’s characteristic telephone journey thus far
In August 2017, Jio unveiled its first 4G characteristic telephone, JioPhone, primarily based on KaiOS. Shortly after its launch, the JioPhone turned the nation’s top-selling characteristic telephone. The candybar telephone additionally later obtained help for fashionable apps together with Fb, WhatsApp and YouTube to develop utilization.
In 2018, Jio launched the next-generation characteristic telephone with a QWERTY keyboard. Nevertheless, the JioPhone 2 couldn’t repeat the success of the JioPhone resulting from its restricted availability and enchantment.
Final yr, the telco launched the Jio Bharat as a $12 characteristic telephone collection to revive its presence within the characteristic telephone market. It additionally up to date the unique JioPhone with a face-lift referred to as the JioPhone Prima. The launch of the brand new fashions helped develop the market of 4G characteristic telephones in India.
Why are thousands and thousands of Indians not shopping for new smartphones?
India’s smartphone market noticed over 11% year-on-year development within the first quarter, the third consecutive quarter of development in shipments, with 34 million smartphone shipped throughout the quarter, in keeping with IDC. Nevertheless, not like the price range value segments (between sub-$100 and $200), the super-premium phase (over $800) noticed the best 44% development, seeing a rise in its share to 7%. It was dominated by the newest and last-generation iPhone fashions adopted by the Galaxy S24 and Galaxy S23 households.
Nonetheless, the share of the entry-level phase (sub-$100) within the Indian smartphone market declined by 14% year-on-year to fifteen%, down from 20% a yr in the past, per IDC. It was 26% of the general smartphone market in 2020 and 20% in 2021.
Market specialists consider that the first cause for the sharp decline in entry-level smartphone shipments is the reluctance of characteristic telephone customers to modify to reasonably priced smartphones.
Navkendar Singh, affiliate vice chairman for gadgets analysis at IDC, instructed TechCrunch that round 350 million folks in India nonetheless use a characteristic telephone, and 50% of them have a mannequin that’s lower than $18. “As a result of they’re not capable of purchase a smartphone, they’re changing their characteristic telephones,” he stated.
Singh additionally famous that India’s smartphone penetration is lower than 50%, and it remained unchanged for the final couple of years, although the market noticed some development in smartphone shipments after the COVID pandemic.
“The transition from characteristic telephones to smartphones is just not straightforward for some shoppers,” stated Counterpoint’s Pathak, including that older folks and folks in low-income teams and blue-collar jobs will not be upgrading to smartphones within the nation.
“The pricing distinction between smartphones and have telephones remains to be broad sufficient to restrict customers to modify to smartphones simply,” he stated.
In response to IDC, a smartphone’s common promoting value (ASP) in India is $255. It grew over 54% from $165 in 2020. The smartphone ASP in India is merely round 31% in comparison with the $826 within the U.S.
Nonetheless, thousands and thousands of individuals discover it onerous to purchase a smartphone in India resulting from their low disposable revenue.
“Whereas India has one of many least expensive smartphones on this planet, as a share of customers’ revenue, it’s much less reasonably priced than even within the U.S. and U.Ok.,” in keeping with a report titled State of India’s Digital Economic system by the Indian Council for Analysis on Worldwide Financial Relations and Prosus.
Smartphone manufacturers supply finance choices to draw consumers. Nevertheless, Singh instructed TechCrunch that the transfer has thus far helped solely current smartphone shoppers improve their fashions.
