Close to 370 million smart feature phones will be sold in next 3 years: Counterpoint

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“This will be enabled by a potential of more than 300 million smart feature phone users globally by the end of 2021. Software and services alone will contribute to 71 per cent of this near- to mid-term revenue opportunity, or around US$20 billion,” Neil Shah, Research Director at Counterpoint Research said in a press statement.

In India, the smart feature phone segment took off after the entry of  Reliance Jio into the market with its Jio Phone and JioPhone 2. The 4G feature phone ensured that other manufacturers also introduced 4G ready feature phones in the market. Many of these are based on KaiOS, which is also present on the JioPhone.

KaiOS supports apps like Google Maps, Gmail, YouTube, WhatsApp, Facebook, etc, which are designed specifically for these feature phones. The introduction of these popular apps on feature phones has also helped this segment grow.

Eight KaiOS-powered devices have been launched with multiple models launching in the first quarter of 2019. These models have been launched across North America, Europe, Africa, South East Asia, and India, notes Counterpoint.

According to Counterpoint, a smart feature phone serves as a perfect middle ground between feature phone and smartphone reducing the barriers to access the digital world. The firm says these devices appeal to less tech-savvy users and first-time users, who prefer feature phones over smartphones.

“The global smart feature phone demand grew 252% year-on-year in 2018 – albeit from a low base, contributing roughly 16% of the total feature phone volumes. While India is the biggest contributor to this demand, major markets that have driven smart feature phone sales include the United States, United Kingdom, South East Asia and Africa,” Tarun Pathak, Associate Director at Counterpoint Research said.

Counterpoint also says that out of more than 100 million subscribers that Reliance Jio added since the JioPhone launch in late 2017, the KaiOS-powered phone contributes close to half of those net additions, which is a very big number.

The firm also says that the growth of smart feature phones will benefit network operators as this is a sure shot way of upgrading existing 2G customers to 4G networks. Network operators can then free-up the 2G spectrum and re-farm it for 4G, upcoming 5G or Low Power Wireless Access (LPWA) IoT networks, says Counterpoint.

“Further, operators have the potential to drive voice as well as data revenues and, in the process, increase the 4G ARPU. We estimate close to $15 billion in connectivity service revenues will be generated, cumulatively, between 2019 and 2021,” Varun Mishra, Research Analyst at Counterpoint Research said.