Reliance Jio's effort to migrate 250 million 2G users to 4G through its ultra-affordable 'JioBharat' and 'JioPhone' keypad devices is facing challenges, with consumer interest waning over time, analysts say, according to an ET Telecom report. While Jio remained one of India's top three feature phone brands in 2024, excitement around its models peaks at launch but fades due to minimal hardware upgrades and growing preference for economically priced smartphones, the report said, citing analysts.
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Declining Feature Phone Market in India
"The shipments in India's feature phone market declined by 9 percent y-o-y in the calendar year 2024, and may fall further in the coming years as people are willing to spend more on their handset devices and the financial schemes make it easier for consumers to purchase a smartphone," the report quoted Shilpi Jain, senior analyst at Counterpoint Research as saying.
"Jio was among the top three feature phone brands in India in 2024. The enthusiasm around the model is high, especially during its launch phase, during which Jio markets its models…but the interest tapers off as the model becomes older," Jain reportedly said.
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Key Reasons for Slowing Demand
The report cited a Cybermedia Research (CMR) report for the December 2024 quarter, stating that the 2G feature phone segment experienced a 22 percent year-on-year (y-o-y) decline, while the 4G category saw a sharp 59 percent drop. All major feature phone vendors, including iTel, Lava, HMD, Karbonn, and Cellecor, faced significant declines in sales volumes, with Reliance Jio falling out of the top five rankings.
Analysts note that both the 2G and 4G feature phone segments have faced significant pressure in recent years, driven by the phased shutdown of 2G networks and the increasing availability of 4G and 5G smartphones priced under Rs 10,000, according to the report.
"High inflation in India is particularly impacting consumers at the bottom of the pyramid that usually buy feature phones," the report quoted Ekta Mittal, senior analyst – connected devices at CCS Insights as saying.
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Inflation and Second-Hand Smartphone Market
"The increased rate of peer-to-peer smartphone circulation and the rise of the unorganised second-hand smartphone market, with a focus on devices priced between Rs 3,000-4,000 has also diverted potential feature phone upgrade users," Mittal reportedly added.
HMD is reportedly working with US-based CloudMosa to equip its feature phones with a cloud (internet)-driven operating system (OS) capable of running multimedia applications, aiming to help migrate approximately 300 million 2G users to 4G.
