Whenever Reliance Industries Chairman Mukesh Ambani speaks, he sets off tectonic shifts that cause ripples of change for years to come. Ripples that are felt across India Inc and beyond, leading to market disruption and forcing competitors to go back to the drawing board.
This Thursday, Ambani addressed the nation in the most ‘socially relevant’ annual general meeting that Indians, over the years, have come to follow. The jaw dropper was a new budget smartphone — JioPhone Next — that Jio has made in partnership with Google.
The media is already calling it the “most affordable smartphone in the world” with features that will match existing budget smartphones but at a reasonably lower price. The Jio-Google phone is expected to hit the markets this September. Though the pricing is yet to be revealed, there are speculations that the phone will cost around Rs 5,000. Disruption again, you see.
For all the vistas of possibilities the ultra-affordable JioPhone Next will unlock, it becomes ThePrint’s Newsmaker of the Week.
Mending the ‘generation’ gap
It is 2021 and India is conducting 5G trials, ready to take a leap to the next generation of high-speed mobile telephony. For the uninitiated, the promise of a budget smartphone by the richest Asian would send confusing signals about the maturity of India’s telecom market. But with over a billion consumers, the opportunities are limitless for Mukesh Ambani whose digital business truly seems to complement Prime Minister Narendra Modi’s Digital India mission. In India, a smartphone, for millions, is luxury.
With India’s most affordable smartphone, Ambani is trying to transform feature phone users into smartphone users. The RIL chairman wants to make India “2G-mukt”. To most, it may not be a big deal, but to a telecom geek, it’s nothing short of a spiritual awakening.
The possibilities are endless. If Ambani succeeds, for he never seems to fail, India will convert at least a couple of hundred million users of these affordable smartphones into ecommerce and app consumers. Reliance’s ecommerce ambitions have increasingly become bold. But the opportunities that a greater smartphone reach will create would not be reserved for those who are making this device. More consumers mean more revenue for businesses – who knows how many more tech unicorns, and billionaires like Vijay Shekhar Sharma, and Sanjeev Bhikchandani, and Byju Raveendran India will give birth to?
Wiping out the Chinese competition
Regardless of its aim to create a new space for its smartphone, one can’t forget that Jio is a juggernaut. And if it has partnered with Google, it intends to show its competitors, who currently define the ‘budget smartphone’ category, the edge it possesses over them. There will be collateral damage to both Chinese and Indian handset makers. The likes of Micromax and Lava were aiming for a comeback, riding high on the Aatmanirbhar Bharat sentiment, after last year’s LAC clashes with the Chinese.
More than the consumers, it is the Chinese handset makers — Xiaomi, Vivo, Realme, Oppo, Transsion — who would be interested in the Jio phone’s pricing. These companies dominate budget smartphone sales in India.
The last time Mukesh Bhai decided to make the telecom sector ‘affordable’ via free 4G internet, it left telecom service providers bleeding and weeping for years to come.
There were nine private telecom service providers before Reliance Jio made its 2016 entry. Today, only two other private players besides Jio exist– Airtel and Vi [previously Vodafone-Idea].
The telecom operator forced India to transform into the highest internet data consumer in the world by making it affordable. Indians don’t think twice before paying bills online, ordering food, studying online — or even watching videos for hours. And you can thank the ‘Jio Effect’ for that.
With its budget smartphone, Reliance is going for Jio Effect 2.0. The new phone is made for India, as Alphabet CEO Sunder Pichai said, and promises segment exclusive features such as “automatic read-aloud of screen text [so you don’t have to be able to read], language translation [so you don’t have to know English to use the phone], smart camera with augmented reality filters”.
Juggernauts too face bottlenecks
Jio and Google are trying to get the 550 million feature phone users in India, living in both rural and urban pockets, to invest in this new gadget and start using it to go online and check cricket scores, buy things, do banking, listen to music, etc.
However, the makers will have to get the price right. Feature phone users spend around Rs 1,200 on their device and these dumber phones absorb physical shock much better than smartphones do. I would know – watch what happens when we threw a Nokia smartphone and a Nokia feature phone off a bridge.
Besides, both Jio and Google haven’t exactly been successful at capturing the budget phone market so far. Jio has launched ‘basic phones’ before this and Google smartphones, in partnerships with local phone makers Micromax and Lava, but neither has seen a resounding success. So there’s no telling whether the two partnering up will prove to be a winning solution.
But this is Mukesh Ambani and Reliance Jio we are talking about: the deep pockets that can sponsor Atmanirbhar Bharat.
I mean, look at how Ambani and Jio units are among the few in the world able to take on global giants like Amazon and Walmart (via Flipkart) in the battle for India’s ecommerce space with a little help from Facebook, of course.
Even if this new budget Jio smartphone doesn’t disrupt the Chinese smartphone makers, it’s sure to, at least, disturb them.
Views are personal.
(Edited by Anurag Chaubey)