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Age of low cost feature phones and smartphones

Age of low cost feature phones and smartphones

By Kanishk Karan

Following in the footsteps of Reliance Jio, the Gurgaon-headquartered handset maker Micromax Informatics is working on cheap feature phones that support 4G VoLTE calls. The move comes after an unexpected slump since Chinese smartphone makers took over the market. The smartphone maker plans to launch two feature phones named Bharat One and Bharat Two, early next month, as per two officials who are in the know of the matter.

“While the VoLTE feature phone could lead to operator tie-ups to push the category and acceptance, the smartphone may have a back-end tie-up with Transerv and MVisa that could enable digital payments,” one of the officials cited above said to ET. As per the other official, talks are on with all major operators. Jio is the only one with a pan India full VoLTE network that is up and running, while other carriers are still experimenting with the technology.

The Indian handset maker is late in manufacturing and operation, but as Chinese brands have taken over the market, Indian smartphone makers are in a volatile position. Addressing a price segment under $50, which accounts for most of the devices sold in India, could help propel it back into the reckoning for the top spot, analysts said.

Overcoming the setback

The second-largest handset company in India, Micromax has slumped to the fifth position in the overall rankings of smartphones.

 Maneuvering into VoLTE phones, the company’s upcoming feature phone will fit well under Rs 2,500. Micromax is also planning to launch 4G VoLTE smartphone at under $50 (Rs 3,300) that may also have an integrated digital payments feature to regain market share on the back of the volumes, two sources said. Launching a VoLTE feature phone will foray Micromax into the territory of Reliance Digital, which is planning similar devices costing between Rs 999 and Rs 1,500 that could hit the market later this month.

As tipped, Micromax’s 4G VoLTE feature phone will have a touch-and-type capability but won’t run on the Android OS. The phone launch will target the market and will fill the basic feature phone service void. Feature phone-to-smartphone conversion has stalled mainly due to low usability for consumers besides comparatively higher prices of data and devices.

A recent example is Itel which offers devices starting at Rs 700 in the feature phone segment, which comprises around 55% of the Indian market. It grew 9% through last year, to 136 million units, contrary to expectations of a decline.

The unpredictability of the market

Smartphone devices grew 5% last year to 109 million units, slower than the previous years, according to IDC data. Also, of the total $17 billion phone market, feature phones account for $2 billion and smartphones account for $15 billion, on the wholesale price basis, as per Counterpoint Research data.

 Micromax is finally entering into the lower tier, by releasing a new set of smartphones and feature phones, which will definitely expand the company’s market prospects. Also, the inclusion of fingerprint and the iris-scanning abilities in low-cost smartphones would add more value to the government-backed digital payments program. However, experts said that adding such features will increase device cost, defeating the purpose of making mobile-based payments more affordable to users across the economic spectrum.

The author is a regular contributor to Trak.
This article was originally published in Trak.
Featured credits: Wall Street Journal

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