NEW DELHI: Reliance Jio Infocomm may well disrupt India’s smartphone market with its low-cost 4G voice over LTE or VoLTE feature phones allowing free calls, the way it did in the telecom sector with its gamechanging tariff plans.
A large number of customers are likely to take to the handsets expected to be launched by the Mukesh Ambani-led telecom operator at Rs 999 and Rs 1,500 during this quarter, according to analysts, who said this may spell a setback of sorts to the smartphone market.
“If VoLTE feature phones come into the market, then there won’t be a driving force pushing for the upgrade to smartphones; rather it will be an upgrade from feature phones to VoLTE feature phones,” said Faizal Kawoosa, principal analyst at Cybermedia Research. “It will be a challenging time for the smartphone market, which could see flat growth in 2017.”
Jio’s VoLTE feature phones are likely to have front-facing and rear cameras, and may come bundled with apps such as Jio Chat, Live TV and video-on-demand. The company may also push its digital wallet service, Jio Money Wallet, according to people in the know.
Analysts said projections of growth in India’s smartphone market this year may have to be revised downwards when Jio’s VoLTE feature phones make their impact.
The first quarter of 2017 is likely to see a 40% year-ononyear decline in any case, due to the lingering impact of demonetisation, they said, forecasting a recovery towards the later part of the year.
International Data Corporation (IDC) and Counterpoint have projected a year-onyear growth for the domestic market in 2017.
IDC expects the market to grow in lower double digits, up from its estimate of 8% growth in 2016 over the previous year. Counterpoint, on the other hand, expects the market to grow 23% in 2017, the same as its estimate for growth in 2016.
Even so, the projections are starkly lower than Counterpoint’s estimates of 56% growth in 2014 over 2013 and 30% growth in 2015 over 2014. Analysts at Counterpoint have said that pent-up demand, smartphone under-penetration, 4G roll-outs and fierce price wars will propel growth this year, while conceding that Jio’s launch could prove a dampener.
Jio’s VoLTE feature phones could increase the rate of migration within the feature phone category while lowering that of feature phones to smartphones, they said.
Source: Economic Times