By Ritesh BendreReliance Jio announced its new ultra-affordable 4G smartphone, JioPhone Next, at its 44th AGM. Built-in partnership with Google, the smartphone will run on an optimized version of Android OS with some cutting-edge features specially designed for first-time smartphone users. With the JioPhone Next, Reliance Jio will primarily be targeting over 300 million feature phone users and some portion of nearly half a billion users who are yet to purchase their first phone.The JioPhone Next will go on sale starting September 10, 2021. While the official pricing has not been revealed yet, it is expected to be available under Rs 5,000. Just like the company’s 4G-enabled smart feature phone, JioPhone; the new JioPhone Next is expected to disrupt the entry-level smartphone market. This represents a big opportunity for Jio and its partners but also brings quite a few challenges for its competitors such as Airtel, Vodafone Idea, and BSNL.Opportunities for Reliance Jio and its platform partnersGet new users to the Android platform:Android is the world’s most popular smartphone OS that now powers over three billion devices globally. With Google looking to increase its share further, the ultra-affordable 4G smartphone for India, the world’s second-largest smartphone market, opens an untapped potential by attracting hundreds of millions of new users to its Android platform and services.Voice-enabled search and UI:The target audience for JioPhone Next are consumers beyond metros, a lot of whom do not speak English. Support for voice interaction in regional language will help bridge the digital divide and language barrier. Cutting-edge features such as on-screen translate that reads aloud the text in the user’s language will help increase the attach rate for Google’s text-to-voice service. Voice-enabled search can also help users find content, be it a recipe or songs on apps like YouTube, without typing. As more users interact with voice, Google also gets more data in different accents and dialects to optimize Assistant and voice search further.Enable richer visual experiences:Besides voice, Jio also stressed on-camera experiences that the JioPhone Next enable. This includes AI-enabled low-light mode allowing users to click clear and brighter photos in challenging lighting conditions. Integration with Google Lens will enable users to click a photo of text and translate it into their preferred language. Jio also highlighted Augmented Reality (AR) experiences in partnership with Snapchat which brings India-specific AR filters built right into the default camera app.Increase content stickiness across services:Jio will look to drive its content and services such as JioCinema, JioTV, JioSaavn music, and more. While these apps existed on JioPhone too, the smartphone offers a bigger screen to experience video content. Jio also recently partnered with Worldreader, which offers children’s books to support under-sourced households with the needed support to build vital literacy skills. The ebooks library includes topics such as nature, science, social studies, storybooks, folk tales, and also health and hygiene-focused ones which can be helpful in current COVID times. Jio also has its team collaboration and video calling app called JioMeet, which it can leverage for educational purposes – where school-from-home has become the new normal.Increased focus on e-commerce and payments: JioMart has played a crucial role during this COVID-19 lockdown restrictions, enabling users to order groceries from the comforts of their homes. The app also integrates a collection of fashion and accessories, and the ability to purchase fine jewelry. JioMart and WhatsApp integration are also in early trials, which will introduce a new commerce solution that will link merchants and consumers. Jio is also onboarding local kiranas from non-metro cities on its platform to enable users to order groceries and more right from WhatsApp. The payments space is another area where Jio has been focusing with Jio Payments Bank. It not only allows to make peer-to-peer payments but also peer-to-merchant payments.Implications on different players in the industryJio competitors:No doubt, the JioPhone Next holds a value proposition for the target audience. But the bigger challenge for incumbent telecom operators is to protect their existing 2G and 3G subscriber base from losing to Jio. Telcos like Airtel, Vodafone Idea, and BSNL will need to make striking partnerships with OEMs to bring a compelling device at a similar price point and move 2G/3G users to 4G. The move also unlocks revenue opportunities to increase ARPUs as these users will need data to consume rich content on smartphones. But it will also be challenging to come up with a device that is optimized for smoother experiences at the ultra-affordable price point.Device OEMs:The entry-level segment has smartphones from OEMs like Lava, iTel, Karbonn, Gionee, and Micromax among others. The JioPhone Next aims at this segment, and Jio’s close partnership with Google makes it an attractive option to consider. But OEMs can take some learning from this partnership and build similar models and aim to launch in markets outside India, such as the Middle East and Africa, among others.Content providers:As first-time smartphone users come to the platform to experience a world of new and interactive features and services, audio and video content will play a bigger role. JioPhone users who upgrade to JioPhone Next already have an access to a wide range of video content. But OTT players will also need to think from the entire ecosystem perspective to make their content available on the lowest possible smartphone hardware too.Component players:If you look at the entry-level smartphones under the $75 price point, these devices are powered by Unisoc, MediaTek, and Qualcomm chipsets made on matured 28nm process. But with a new market opening up with over a billion potential users, chipmakers have the opportunity to introduce more powerful and energy-efficient chipsets. Even for display makers, this is a new potential market-moving from the small screen on feature phones to bigger LCD screens on entry-level smartphones. Opportunities also exist for cover glass makers like Corning, Asahi, and others. Lastly, camera module vendors also get a big opportunity to introduce a good camera sensor in that ultra-affordable price point, unlocking richer photography and videography experiences for first-time smartphone users.Alternate Platform Providers:When the feature phone market was getting stagnant with no innovation, KaiOS disrupted the space by designing a customized and optimized OS for smart feature phones. Working with partners like Jio, Google and Facebook among others, KaiOS successfully deployed apps like WhatsApp, Facebook, Google Search, Maps, YouTube, and more by optimizing them for the non-touch OS. However, with Jio courting Google Android to target the next half billion users, KaiOS need to pivot to capture the larger piece of the 4G market on the cusp of the 5G transition. KaiOS will need to catch up with Google and come up with a disruptive touch-based Android OS alternative. They will also need to work closely with Jio’s rival operators and OEM partners to bring these devices to their target audiences. Maybe KaiOS goes from friend to foe.Overall, an ultra-affordable 4G smartphone will be a game-changer for operators in offering cutting-edge features to first-time smartphone buyers. But the overall experience is something that no one has been able to crack so far. Google failed with Android Go and Android One programs earlier, but the new approach to bake key features and services within the OS could prove successful this time around. This success can then be replicated by Google across other major markets around the globe, and capture the next billion users.(The author is Global Content Manager with Counterpoint Research)
