Reliance had disrupted India’s mobile telephony market in 2002 by offering calls that were cheaper than the cheapest. At the company’s last shareholder meeting, it was announced that it would offer 100 million low-cost smartphones. Now it looks like these phones could once again disrupt the smartphone business.
Reports are emerging that these smartphones, built on Google’s Android platform, could be available for as low as Rs. 5,000 (approximately $68) when it is likely to hit the market in 2021. But, that’s not all, the reports indicate that the prices may drop further to as low as Rs.2,500 (just $34 at current exchange rates).
A report by wire agency PTI quoted an unnamed official to suggest that Jio would get the devices to the customer for less than Rs.5,000 and when sales get scaled up, the phone prices could drop further in the range of between Rs.2,500-Rs.3,000. The aim is to significantly expand smartphone adoption in India, the official said.
What’s more interesting is that Jio noting that these affordable Android-powered devices would come enabled with 4G and 5G technology. Considering that prices of 5G smartphones are hovering in the range of Rs.25,000 ($350), if Jio does get costs down by ten times, we could be witnessing another market disruption.
When Reliance had launched its CDMA technology services in the December of 2002, cellphones were considered a luxury, given that users were paying for both outgoing and incoming calls. Monthly tariff was in excess of Rs.1,000 but Reliance came up with a Rs.500 offer that provided a free CDMA device into the user’s hands.
If “Kar Lo Duniya Mutthi Mein” (get the world into your fist) was the theme that the company brought forth 18 years ago, this time Jio calls it “2G-Mukt Bharat”, which roughly translates into an India without 2G. As part of this slogan, Jio is hoping to get between 200 to 300 million smartphones shipped to users.
Given that Reliance Jio is already the market leader in mobile telephony with more than 400 million subscribers, this could well be a death blow to both competitors in the services business as well as the hardware segment where Chinese smartphones have ruled the roost for some years now.
The report does not provide information on when the phone launch could happen, though earlier rumours had suggested a December soft launch to coincide with the Birth Anniversary celebration of the group’s founder Dhirubhai Ambani. That date is on December 28 and we will keep a close watch leading up to it.
Readers would recall that Jio already has a partnership going with Google to bring low-cost smartphones on a new optimized version of the Android OS. Google had invested Rs.33,737 crore to acquire a 7.1% stake in Jio Platforms back in July, amidst reports that Reliance Jio was already working on setting up its own 5G network.
Earlier in September, reports said Jio’s key competitor Airtel was in talks with some local phone makers to launch its own 4G smartphone at an affordable price. It also looks like Airtel is exploring a plan to come up with both locked and unlocked versions of smartphones, which would be a first in India.
Looks like there is another disruption round the corner in India’s telecom story that began in 1996.