JioPhone and KaiOS are redefining the feature phone landscape in India

In April 2018, Counterpoint Research released a report which almost heralded the second-coming of the humble feature phone. According to the report, while the smartphone growth was mostly flat as compared to last year, the growth in the feature phone segment was almost double. While Xiaomi caused an upset in the smartphone segment, thereby taking away share from its closest competitors such as Vivo and Oppo, it was the feature phone segment that saw some interesting numbers. JioPhone, which had no representation in Q1 2017, was the leader in Q1 2018 with a 35.8 percent market share, a third of that feature phone market pie, followed by Samsung and iTel. JioPhone hits the 25 million milestoneAt the 41st Annual General Meeting (AGM) of Reliance Industries, its chairman and managing director Mukesh Ambani announced that 25 mn JioPhones have been sold to date.In addition to this, Ambani announced the JioPhone 2 and a Monsoon Hungama offer. The offer lets you exchange your existing feature phone with a JioPhone for a fee of Rs 501. This knocks Rs 999 off the price of a new JioPhone. Jio’s content portfolio with the JioTV, JioCinema, JioMusic, JioXpressNews certainly proved to be of benefit considering the KaiOS platform had limited support for most of the popular apps we saw on smartphones. As a platform, the JioPhone proved to be offering more value to feature phone buyers, and that showed in its sales numbers since launch.[caption id="attachment_4670961" align="alignnone" width="1024"] The Jio Phone 2[/caption]This is still a small fraction of the total number of feature phones being sold in India, according to IDC India associate research director Navkendar Singh. “The overall annual feature phone shipments for India market were more than 160 mn units in 2017 and the installed customer base is more than 450 mn feature phone users. One of the factors driving the feature phone market is the price. At Rs 1,500, the JioPhone was still expensive for the current set of feature phone users to migrate,” said Singh.Jio seems to have it figured out, and its exchange offer with a new JioPhone being available for Rs 501 should certainly help in giving a boost to the sales. Singh feels that it should lead to a significant upside to sales in 2H 2018. “The goal that I have now set for our Jio team is to enable 100 mn users on this JioPhone platform in the shortest possible time,” Ambani had stated in his keynote at the RIL AGM. Considering Reliance Jio has acquired 215 mn users in 22 months, the JioPhone goal does not seem too distant either. Especially so with the new Monsoon Hungama offer and a newer JioPhone 2 on the anvil.Feature phone advantage over entry-level smartphonesBack in late 2016, a report from Mobile Marketing Association had thrown up some interesting insights pertaining to feature phones. “85 percent of the urban population in India owns a mobile phone, either a feature phone or a smartphone. Out of these, a whopping 56 percent of users actually use feature phones, although smartphones get most of the attention. 75 percent of feature phone users were from the upper socio-economic class. 25 percent of feature phone users were from the lower income category. Half of the users consume music on their feature phones and a third watch videos as well as play games,” outlined the report. The advantages of feature phones, in an age when smartphones should technically be the most popular devices in terms of sales numbers, are many. Tarun Pathak, associate director at Counterpoint Research says that more people are now upgrading from one feature phone to another feature phone, something that wasn't the case earlier as the average lifetime of a phone is around 3-4 years.  “The cheapest Android smartphone around Rs 3,000 cannot offer the same kind of complete experience, which you can get on a feature phone. This is a deal breaker for many. Smartphones priced at Rs 3,000 constitute only 1 percent of total sales, so there is a huge scope for smart feature phones to add value in this segment,” said Pathak. With JioPhone and an affordable internet plan, paired with the Jio content library, feature phone buyers get a lot of value overall. [caption id="attachment_4493957" align="alignnone" width="1280"] Commuters watch videos on their mobile phones as they travel in a suburban train in Mumbai, India, April 2, 2016. Image: Reuters[/caption]KaiOS is a challenger to Android GoLooking at the traction that KaiOS is getting via JioPhone, it is no surprise that it has got the attention of major app makers. In addition to announcing the brand new JioPhone 2, we also learned that YouTube, WhatsApp and Facebook — three of the most popular social media apps, each boasting of over 1 billion users — would be coming to KaiOS. Do note that unlike an Android Go version of these apps, the KaiOS apps have had to be built from scratch since it’s an altogether different platform. “This is a major development, which will definitely boost the JioPhone appeal to the users who till now had no reason to buy another feature phone, merely on the back of Jio apps and video content. Now, they can use these most commonly used apps and get the experience of data services and use the phone more frequently,” said Singh.KaiOS is the Linux-based operating system on which the JioPhone runs. Nokia also has its banana phone a.k.a. Nokia 8110 which runs on KaiOS, and after the JioPhone-WhatsApp announcement, HMD Global chief product officer Juho Sarvikas also sent out a tweet, almost confirming that WhatsApp is coming to Nokia 8110 as well. Of course, the Nokia 8110 is yet to come to India.  There is a huge scope for growth with more OEM partnerships for KaiOS. Looking at its India success story, it is not difficult to foresee more KaiOS-based phones releasing in the coming months. Long story short, KaiOS has certainly proved to be an OS to reckon with. Recently, Google invested $22 million in KaiOS, so it is safe to assume that more Google apps will be making their way to KaiOS. This is for the simple reason that the feature phone market is a huge segment for Google (or anyone else for that matter) to ignore. Mind you, Google has its own operating system for entry-level phones as well, called Android Go. While it holds a lot of promise, there hasn’t been much traction in terms of the number of Android Go devices sold.“If the Android Go mobile phone ecosystem is not able to bring a smartphone at < $40 (around Rs 2,800) in the next year or so, KaiOS has a big advantage in creating an ecosystem and user base on the back of the JioPhone range, enough to challenge Google at the lower end of the market,” feels Singh. Referring to the MMA report, “Feature phone users are voracious consumers of multimedia, higher than the average, in fact. Feature phone users spend 4x more time watching television as compared to the national average.” JioPhone with its content bouquet has this part covered. Support for YouTube, Facebook and WhatsApp just raise that content consumption bar even higher. Local language support and India-specific servicesAn advantageous factor with the JioPhone in particular is the support for regional languages. As many as 22 Indian languages including Assamese, Bengali, Bodo, Dogri, Gujarati, Hindi, Kannada, Kashmiri, Konkani, Maithili, Malayalam, Manipuri, Marathi, Nepali, Oriya, Punjabi, Sanskrit, Santhali, Sindhi, Tamil, Telugu and Urdu are supported. Voice Assistant on JioPhone can understand commands in English and Hindi. In a country where a majority of the population is not comfortable with English, this is a unique feature to onboard a user.[caption id="attachment_3937259" align="alignnone" width="640"] The fact that Indus OS is the second most popular mobile phone OS after Android speaks volumes about the importance of regional languages on mobile[/caption]“India being such a diverse market with differing needs of customers from different regions and states, is a challenge for any device maker. Vernacular content and local language support will be the critical component for the adoption of Jio services and devices,” feels Singh. And it’s not just international apps being made for the KaiOS platform that will differentiate one KaiOS phone from the other. The trick lies in developing apps which are relevant to the Indian milieu. JioPhone has an app like JioKisan which lets farmers sell their products via the mobile phone. Voice commands in Hindi can be super valuable for the elderly or those not comfortable with typing out commands. Pathak puts it best, “We will see more 2G phone users upgrading to 4G feature phones, instead of 4G entry-level smartphones.”JioPhone and KaiOS are leading this revolution. And it is just the beginning. Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Firstpost