Indians stick to cheap feature phones amid smartphone affordability issues
India, the world's second-largest phone market, is witnessing a surge in feature phone usage due to smartphone affordability concerns. According to Counterpoint, a market analyst firm, feature phone shipments in India saw a 10% year-on-year (YoY) growth last year. Despite the growing smartphone market, many Indian consumers are opting for feature phones over smartphones. The dominance of 2G feature phones is evident with a 75% share of the market. There has also been an increase in 4G feature phone shipments.
Reliance Jio leads the trend, plans new launch
Reliance Jio, an Indian telecom giant, leads the 4G feature phone market with a 27% share. Itel and LAVA follow closely with shares of 24% and 18%, respectively. According to Tarun Pathak, Research Director at Counterpoint, "the 4G feature phones from Jio have hindered smartphone adoption in the country." In a bid to further penetrate the market, Reliance Jio is reportedly planning to launch a 5G feature phone, which will run on Linux-based software KaiOS.
Feature phone users hesitant to switch to smartphones
Despite an 11% YoY growth in smartphone shipments, India's entry-level segment saw a 14% decline. Navkendar Singh, Associate Vice President for Devices Research at IDC, attributes this drop to feature phone users' reluctance to switch. Singh noted that "around 350 million people in India still use a feature phone, and 50% of them have a model that's less than $18 (around ₹1,500)." This affordability issue is causing many consumers to replace their existing feature phones instead of upgrading to smartphones.
Smartphone price hike limits user transition
The transition from feature phones to smartphones is also being hindered by the significant price difference between the two. Pathak pointed out that, "older people and people in low-income groups and blue-collar jobs are not upgrading to smartphones." The average selling price (ASP) of a smartphone in India has risen from $165 (nearly ₹13,800) in 2020 to $255 (roughly ₹21,300), further limiting user transition. This stark contrast in pricing continues to fuel the growth of the feature phone market.
Reliance Jio's 5G feature phone under development
Reliance Jio's 5G feature phone is currently being prototyped by Dixon Technologies and Neolync. While the announcement is expected at Reliance's annual general meeting in August, sources indicate that the device may not be ready for mass-market release anytime soon.
