JioPhone Next, the upcoming smartphone “jointly developed” by Jio Platforms, a majority-owned subsidiary of Reliance Industries, and Google will have to deliver on user experience for large scale adoption, say multiple analysts. Initially announced in July 2020, Mukesh Ambani, Reliance Industries chairman at the company’s annual general meeting on Thursday, shared further details of the smartphone. Ambani said that the upcoming JioPhone Next will be “by far, amongst the most affordable smartphone not just in India, but globally.” However, Edelweiss Research, a leading domestic institutional brokerage house on Thursday said that it believes “price is not a key challenge in smartphone adoption in India.”
JioPhone Next Need to Deliver “Long Lasting Battery,” Say, Analysts
Ambani said the JioPhone Next will be “powered by an extremely optimised version of the Android Operating System” and that the device features include voice assistant, language translation and smart camera with augmented reality filters. In a joint release on Thursday, Google and Jio said that the device will enable users to “easily access and consume content in a choice of Indian languages.” However, the companies did not provide a price point for the JioPhone Next but revealed that the device will be available starting September 10, 2021.
Edelweiss Research said that the smartphone price on average in India is “well over” US$150, roughly translating to Rs 11,130. Crucially, the firm also said that there is “low demand for smartphones” priced between Rs 4000 to Rs 7000.
“Many users prefer feature phones due to their ruggedness, long-lasting battery and less complex UI,” Edelweiss Research said in a report on Thursday. “Hence, we believe [the] new 4G phone may cannibalise other brands, but fail to attract [a] significant proportion of feature phone subscribers.”
The firm highlighted that Reliance Jio between 2016 to 2017 “launched affordable 4G smartphones under LYF brand” including Flame, Wind, Water and Earth series but that its “success was limited.” The devices under the LYF brand were priced between Rs 2999 to Rs 19,999, with the Earth being its premium device.
Motilal Oswal Financial Services, an Indian diversified financial services firm shared similar sentiments with the firm also highlighting that the existing JioPhone has had an “limited impact” on Bharti Airtel.
“It has historically proved challenging to upgrade customers from the low-income bracket (the product’s target market) to high data consumption packs,” Motilal Oswal said in its report on Thursday. “Therefore, RIL may offer long term plans to subsidize the device cost and monthly spend, extending the return on investment.”
The firm also said the “long-lasting and high data consumption capability” and its durability along with the pricing will determine the “success” of JioPhone Next. However, Motilal Oswal said the “success” of JioPhone Next “could pose a risk” to the “non-data” user base of Airtel and Vodafone Idea who are “yet to upgrade to 4G.”
Vodafone Idea, Bharti Airtel “May Come Out” with “Competitive Strategy”
Meanwhile, Deepa Dhingra, senior telecom analyst at GlobalData told TelecomTalk that Jio will “likely” launch JioPhone Next with “free data packages to undercut the competition.”
“We believe that the strategy would accelerate the consumer transition from feature phones to smartphones bringing more Indians online, and particularly over Jio’s Network,” Dhingra told TelecomTalk.
Dhingra said that the JioPhone Next has “already stirred the conversation regarding new combating strategy from Airtel and Vodafone Idea.” The GlobalData telecom analyst also said that the “transition of 2G users to 4G services will definitely gain momentum with the availability of affordable 4G smartphones” like JioPhone Next.
“Jio is looking to take advantage of the growing need of high-speed services amid the pandemic,” Dhingra said in an email interview. “The move may affect new subscription additions for Airtel and Vodafone Idea but we can’t comment on long term impact as these operators too may come out with some competitive strategy.”
Dhingra said that the company expects the JioPhone Next price to be below Rs 5000, “inclusive of data packages” and highlighted that the “free 4G services” worked for Jio in its early days. The GlobalData telecom analyst said that the strategy used by Jio in its early days aided the operator to “gain a substantial user base and become the leading player.”
“In India, affordability remains a primary factor for mobile users,” Dhingra said. “Low prices of smartphones are most likely to attract a significant number of feature phone users for Jio for whom affordability has remained a crucial factor.”
Dhingra also highlighted that the existing JioPhone enabled the operator to acquire 100 million users.
It has to be noted that the Telecom Subscription Data for the period ended March 31, 2021, released by the Telecom Regulatory Authority of India highlights that Jio recorded over 79 lakh gross user additions. Motilal Oswal said that Reliance Jio received a “boost” from the relaunch of JioPhone in March. The firm also highlighted that the operator in the previous six to seven month period recorded a “muted” user addition of around 10 lakhs to 20 lakhs per month.
