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Samsung loses top spot in feature phones to Reliance Jio in India

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Last updated: January 24th, 2018 at 15:27 UTC+02:00

While smartphones hog all the limelight online, feature phones still have a huge market in many parts of the world. In 2016, according to Strategy Analytics, the total feature phone shipments stood at a staggering 396 million units, accounting for 21% of all mobile phones shipped that year. Just as with smartphone shipments that year, Samsung secured the top spot by shipping 52.3 million feature phones, resulting in 13.2% market share globally.

India is one of the few countries where the feature phone market is still expanding, and Samsung has been the market leader so far. However, according to data from Counterpoint Research, Samsung lost the top spot to the carrier branded feature phone from Reliance Jio, commonly referred as JioPhone, in Q4 2017. This adds to Samsung’s increasing troubles in the Indian market where it has been facing fierce competition from the Chinese OEMs.

Samsung is pushed to the second place

As per industry sources over 15 million JioPhones were shipped in Q4 2017 of which around 12 million units were sold to the consumers. This helped Reliance Jio secure a 27% market share in feature phone shipments during the last quarter. Samsung dropped to the second place with 17% market share, followed by Micromax, Itel and Nokia. The feature phone market itself saw an impressive growth of 51% year-on-year, and 43% year-on-year quarterly growth to 50 million units.

This is not entirely surprising given the value for money proposition offered by Jio’s featurephone. Unlike most other feature phones which often lack WIFI or even 3G, Reliance JioPhone is the world’s first 4G-Volte enabled feature phone and comes with many features often found only on smartphones.

The most important reason for JioPhone’s success, however, could be attributed to its price. The device is free with a few caveats. A customer willing to buy the JioPhone must pay a security deposit of INR 1500 (~$24) and agree to recharge every month with any of the Jio plans starting at INR 153 (~$2.5). The plan offers unlimited calls within India, free text messages, access to Jio’s suite of entertainment apps, and 1GB of high-speed 4G data every day for 28 days. A customer can get back their security deposit after 3 years if they recharge for a cumulative minimum of INR 1500 (~$24) per year. Unsurprisingly, the device and base plan is extremely appealing to the cost-conscious and economically poorer sections of the society.

JioPhone went on sale during the last quarter and faced huge supply constraints due to the overwhelming demand. The carrier has apparently resolved the battery and chipset supply issues and is now planning to relaunch the phone next month. Frankly, there is not much that Samsung can do here to compete with Jio’s feature phone as the carrier can sell the phone at cost or below-cost and recoup the profit through phone plans. This is a fundamentally different business model compared to Samsung selling devices for a profit.

Via Phone India
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