Reliance Industries Limited (RIL) recently hosted its 44th annual general meeting (AGM) event online. RIL announced its upcoming handset offering called the JioPhone Next. JioPhone Next will be a 4G Android-based device in collaboration with Google. Many global and domestic handset manufacturers welcomed the entry of the most affordable handset. Smartphone manufacturers expect the JioPhone Next to expand the market and provide a potential upgrade opportunity to customers. According to industry executives, the expansion and upgradation opportunity will emerge as new buyers using smartphones for the first time will enter the market.
Reliance Jio Not Competing with Handset Brands
As per an ET Telecom report, according to a senior executive at a top Chinese smartphone brand, Reliance Jio’s new handset JioPhone Next is not competing with any handset brand. Reliance is actually competing with rival telecom operators to gain more 4G subscribers. He further added that with average prices of smartphones increasing year after year, smartphone manufacturers had left the below Rs 7,000 segment. It is popularly known that this particular entry segment is not profitable, but Reliance Jio plans to burn large amounts of cash to try and move the sticky feature phone base.
Manu Kumar Jain, Xiaomi’s Managing Director, had earlier commented on the new affordable smartphone entry’s impact on the market by stating that they are keeping a close eye on the upgrade opportunity that arises out of the new smartphone user base buying Reliance Industries’ affordable 4G smartphone. He said that Xiaomi believes that a smartphone selling at 3000-4000Rs price point will only expand the overall smartphone market instead of taking any market share away.
Reliance Industries Targeting India’s 300 Million 2G Feature phone Users
Reliance Jio’s new ultra-affordable 4G smartphone will be the company’s best to target India’s 300 million 2G feature phone users. Reliance had moved the mobile network market upside down when it has announced Jio, and the company plans to stir up India’s smartphone market with JioPhone Next.
However, analysts believe that JioPhone next can only solve the affordability issue among Indian users if the 4G smartphone is priced at or below Rs 2000. Navkendar Singh, Research Director of Client Devices & IPDS at IDC India, has said that if Reliance aims to get the 200-300 million feature phone users onto smartphones, then their upcoming 4G smartphone should be priced below Rs3000. His statement is based on the fact that feature phone users currently use phones priced under Rs1200 and cannot be expected to jump to Rs 4000-6000 phones.