July 16, 2024


Unlimited Technology

What Reliance’s new smartphone needs to break the Chinese brands’ grip on India

India’s largest private company has finally launched its “ultra-affordable” smartphone, but disrupting the market, which it intends to, will likely involve a serious battle.

The 6,499 rupee ($87.26) JioPhone Next, developed by Reliance in association with Google and Qualcomm and launched yesterday, targets first-time users and those eyeing an upgrade from the feature phones.

But will it pack a punch strong enough to get Chinese brands like Xiaomi, Vivo, and RealMe and the South Korean Samsung to loosen their grips on the $25 billion Indian smartphone market?

“India is a populated country and Jio is a trusted name with a customer base of 400 million users. A mingling of the two can provide the necessary success for the new launch,” said Siddharth Maurya, resource specialist and a fund management expert.

“A majority of Indians fall in the belt between middle class to lower levels. Coming out with an affordable range with all the features, plus value additions, can hold worth for the target audience.”

What Reliance’s JioPhone Next offers

The dual-sim smartphone was to be launched in September, but that didn’t happen due to a chip shortage. It features a 5.45-inch HD+ display and is protected by third-generation Gorilla Glass. Powered by a 3,500 milliampere/hour battery, JioPhone Next has a 13 MP main camera and an 8MP selfie lens.

Reliance has rolled out an EMI option with a down payment of Rs1,999, eyeing the first-time smartphone user from rural and low-income groups. The instalment amount starts from Rs300 and is for 18 and 24 months.

In 2019, there were around 550 million feature phone users in India, some 45% of whom used handsets costing under Rs1,000.

India’s China-dominated smartphone market

The bright prospects aside, some analysts are circumspect about any easy success for JioPhone Next.

“The India smartphone market is hyper-competitive, with the top five smartphone brands garnering a lion’s share. There are other brands that own a clear niche with their differentiated smartphone offerings,” explained Prabhu Ram, head of market intelligence firm Cyber Media Research (CMR).

Chinese players Xiaomi, Vivo, and RealMe rule the roost with a variety of products priced even below Rs5,000. OnePlus leads the premium segment.

Pricing aside, the Chinese monopoly rides on both efficient and productive labour and technology.

“Once Reliance will focus on bringing in the technology rather than utilising the existing labour at home, the results can be dramatically good for JioPhone Next,” Maurya said.

The road ahead for JioPhone Next

Affordability will clearly be a key factor—something Reliance’s JioPhone Next, priced at a little more than what was expected, will have to address, experts said.

“In 2022 and beyond, Jio would be better placed to drive volumes with the easing of supply constraints,” Ram of CMR said.

Another factor would be innovation.

“If Reliance fails to come up with new features, it might be possible that its JioPhone Next will actually end up boosting sales of its competitors,” said Prachir Singh, senior analyst at market research firm Counterpoint Research.

“Reliance will unlock the new world for feature phone users upgrading to the smartphone era, but to sustain this userbase it has to keep offering new things or else they will migrate to other brands in the search of a better user experience.”

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