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Why Reliance JioPhone is actually a threat to smartphones

Reliance Jio will begin taking pre-bookings for its much-anticipated JioPhone later today. The pre-booking for the 4G feature phone starts 5:30 pm at the company’s own retail stores, website and the Jio App. Customers need to pay Rs 500 booking amount.

Written by Anuj Bhatia | New Delhi |
Updated: August 25, 2017 8:17:06 am
Reliance Jio, JioPhone, Reliance JioPhone, JioPhone bookings, JioPhone price JioPhone has been an ambitious project for the Mukesh Ambani-led Reliance Jio, and the company is targeting over 100 million units to be shipped in the first year.

Reliance Jio will begin taking pre-bookings for its much-anticipated JioPhone later today. The pre-booking for the 4G feature phone starts 5:30 pm at the company’s own retail stores, website and the Jio App. Customers need to pay Rs 500 booking amount and the balance Rs 1000 at the time of delivery sometime in the first week of September.

JioPhone has been an ambitious project for the Mukesh Ambani-led Reliance Jio, and the company is targeting over 100 million units to be shipped in the first year. JioPhone is an inexpensive, more advanced version of a regular feature phone with a built-in 4G VoLTE support for the masses. It will “effectively” cost Rs 0, as users are required only to pay Rs 1,500 security deposit, which can be refunded after three years.

“JioPhone will arrest the decline of feature phone segment and eventually accelerate upgrades within the feature phone segment. This will impact the sales of sub $50 smartphone segment which is now contributing to almost 3 per cent of smartphone shipments in 1H 2017,” said Shobhit Srivastava, Research Analyst, Mobile Devices and Ecosystem at Counterpoint Research.

The analyst expects Reliance Jio to ship 15 million units of the JioPhone this year as the demand for the feature phone is estimated to be high in India. Its low price may appeal to a large section of the population, mostly using feature phones with limited access to internet. “We expect more than 15 million JioPhones to be shipped within 2017 as the demand for the low cost 4G enabled device is very high,” Srivastava told Indianexpress.com.

JioPhone has been dubbed as “India ka smartphone” and will let users to browse the web, attending video calls, and watch movies on the go. Feature phones are generally limited to calling and SMS. The phone also supports popular social media apps like Facebook, but not the popular WhatsApp messenger. The monthly plan on the JioPhone has been set at Rs 153, which offers 500MB of data per day for 28 day validity. Reliance Jio will be offering a weekly plan for Rs 54 and a two-day plan for Rs 24 for unlimited data access.

The launch of the JioPhone has surely made ripples in the telecom sector and rivals are expected to counter with their own devices and plans soon. The analyst said the JioPhone’s low price tag and attractive features could prompt other domestic players to launch 4G LTE-enabled feature phones. However, it may not seem as easy as it appears for domestic handset makers to sell a fully loaded phone with 4G LTE at such a low price.

“Domestic handsets makers will surely launch LTE feature phones to counter Jio offering but that is going to be an uphill task for them as Bill of Material (BOM) cost doesn’t allow them to compete with Jio at this point unless subsidised. To bring the cost down they might tie up with other operators going forward and bundle the data with 4G feature phones. Alternatively, they can be an EMS to the operators launching their LTE feature phones”, Srivastava said.

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