India’s Most Valuable Company is in talks with national assemblers to make a version of its Jio phone that would run on Google’s Android and cost roughly ₹4,000 ($ 54), said the people, who asked not to be identified as the plans are private. The budget phones will be marketed with low-cost wireless plans from Reliance Jio, the operator of the parent company, they said.
Reliance Chairman Mukesh Ambani aims to remake the country’s smartphone industry in much the same way as he did wireless, where its aggressive pricing and simple plans quickly made it the dominant force. The billionaire is also aligning with the Indian government’s plans to build more domestic manufacturing, a possible boost for local assemblers such as Dixon Technologies India, Lava International and Karbonn Mobiles.
“Of course we are trying to build our national companies. We have a sweet spot in entry-level phones, “said Pankaj Mohindroo, president of the India Cellular & Electronic Association, during an interview on Bloomberg Television.” The world has realized that India is a great place to do business and a great place to manufacture as well. “
Representatives for Reliance declined to comment.
Reliance’s goal of selling 150 to 200 million phones over two years would represent a massive boost to local factories. India assembled roughly 165 million smartphones in the year ending in March, and roughly the same number of phones with basic features, according to the Mohindroo association. About a fifth of smartphones cost less than Rs 7,000, or about $ 100.
Reliance’s rival Bharti Airtel is also in talks with assemblers to build its own 4G device, local media reported. The Business Standard previously reported that Ambani was considering outsourcing phone manufacturing.
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In July, Reliance established a broad partnership with Google, in which the Alphabet Inc. unit would invest $ 4.5 billion and cooperate on technology initiatives. The association is still under regulatory review, so Reliance is proceeding with the mobile phone initiative on its own for now.
Ambani has attracted more than $ 20 billion in investments from US giants like Facebook Inc. for Jio Platforms Pvt, whose subsidiary Reliance Jio Infocomm Ltd. is placing the order. He has worked with assemblers on prototypes for at least two years in secret and can quickly get a phone to market, although the November Diwali shopping season is likely to be missed, the people said.
If Reliance succeeds in popularizing the new device, it could elevate the prospects for Jio platforms, accelerating Ambani’s efforts to build an empire that encompasses e-commerce, social media, and gaming. Many of Jio’s nearly 400 million users use simple second-generation devices and pay $ 2 a month for voice and data, a huge potential market for the new device. Eventually, it could erode the market share of Chinese phone makers like Xiaomi.
“Jio has the opportunity to target more than 500 million Indians who do not own a smartphone and create an opportunity in the blue ocean market,” said Neil Shah, research director at Counterpoint Research. you will lose a potential opportunity and market share. “
Reliance’s own requirements could be around 5 million devices per month initially, but no Indian company currently has that kind of capacity, so the order will be split among multiple assemblers, the people said. At least two domestic smartphone makers are in talks with the telecom giant, the people added.
Phones have become essential for accessing lightweight versions of apps from WhatsApp to YouTube in a country with an average GDP per capita of around $ 2,000. That’s why entry-level devices that cost between $ 100 and $ 250 accounted for three-quarters of sales in the second quarter of 2020, according to Counterpoint.
Reliance’s fourth-generation wireless devices, one tier below 5G, are targeting the estimated 350 million users of entry-level or feature phones that now dominate the Indian industry. Speaking at an industry event a few weeks ago, Ambani said that millions were “stuck in the 2G era.”
“Their feature phones keep them excluded, even from basic Internet uses, at a time when both India and the rest of the world are at the gates of 5G telephony,” he said.
The pandemic is prompting people to upgrade and create new market opportunities. For example, parents are eager to put a device in the hands of their children so that they can keep up with online lessons. There are an estimated 250 million children between the ages of 6 and 16, according to UNICEF.
“If they succeed in getting even 10% of this base to upgrade, Jio can become one of the leading smartphone brands of 2021,” Shah said.
This story was published from a news agency feed with no changes to the text. Only the title has been changed.
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