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Why JioPhone Next could be a letdown of Mukesh Ambani’s vision to make India 2G-mukt

Jio and Google have launched the JioPhone Next, which will be available in stores from Diwali onwards, at a price of around Rs 6,499. 

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New Delhi: It had sparked considerable excitement but analysts say JioPhone Next, the “most affordable” smartphone developed by Jio and Google, is too expensive and a let-down to Reliance chairman Mukesh Ambani’s own vision to make India 2G mukt.

The phone was highly awaited, ever since its September launch was delayed due to “semiconductor shortages”. Much of the excitement and anticipation was to see how cheap a smartphone can be priced, since it was made by two tech giants in Jio and Google. 

The suspense ended on 29 October when the phone was launched, with the companies issuing a statement that it would have “an entry price of only Rs 1999 and the rest paid via easy EMI over 18/24 months”.

In effect, the phone, to be available in stores from Diwali, has been priced at an up-front rate of Rs 6,499. The price is even higher in the EMI option, as this also includes a processing fee of Rs 501.

Analysts say the price tag is too high to get the estimated 550 million feature phone users on 2G network in India to switch to the Jio Phone that operates on 4G.

They say they were expecting the phone to be a smartphone priced like a feature phone, so that feature phone users can afford to switch to 4G.

Feature phones cost around Rs 1,200, a far cry from the Rs 6,500 that the new JioPhone costs.

“At Rs 6,499 ($87), it is priced out of the reach of that huge 370-400 million feature phone user base, almost half of which use a feature phone priced less than Rs 1,200 and spend less than Rs 150 a month on their monthly voice plan,” said Navkendar Singh, research director at International Data Corporation (IDC), India, a market intelligence firm in the IT and telecom sectors.

“Expecting millions of these users to buy a new device that is much more expensive but less robust, has worse battery and will wear/tear much faster than their current feature phone is not very realistic,” he added.

“JioPhone Next will still sell a few million units (limited by supply challenges like chip shortage and container shortage) but may end up appealing more to Rs 5,000 to Rs 8,000 segment buyers (US$75 to US$110) and to the refurbished smartphone buyer segment,” Singh said.

“The previous Jio phones since launching have sold about 100 million units while priced under Rs 5,000. So to expect the latest JioPhone to sell more than that will be challenging, considering the price and ongoing supply situation.”


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‘Product specifications not a problem’

Neil Shah, vice-president of research at the consumer electronics analytical firm, Counterpoint Research, said, “The current pricing is too high. Perhaps, the better pricing would have been to have the first down payment at Rs 2,500 and then have EMI installments of around Rs 100. It is not a matter of the product specs (specifications) that will slow down phone sales – that could have been worked around. The challenge to selling large volumes to convert 2G feature phone users into 4G smartphone users is the current pricing.”

Not everyone, however, believes that the price is the problem. 

Faisal Kawoosa of TechARC, another market research firm, said “the JioPhone Next is alright for the price of Rs 6,499 given the tech specs”.

The new JioPhone Next comes with a Qualcomm Snapdragon QM215, a processor for entry-level affordable phones; dual SIM capability; a 3500 mAh battery; and a 13 MP rear camera and a 8 MP front camera.

“However, there are better phones from Realme, Infinix in the same segment that offer better features,” Kawoosa added. “The expectation from analysts was that this phone, built by tech giants like Jio, Google, and Qualcomm, would be much more affordable, and attract feature phone users to switch to smartphones. But that has not happened with the latest Jio phone.”

(Edited by Arun Prashanth)


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