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Reliance Jiophone Could Revive Dying Cell Phone Market: Analysts 2021

Reliance Jio presented its 4G feature phone, the so-called JioPhone, at the 40th Annual General Meeting today. The device comes with a refundable deposit of 1,500 rupees, which is returned after three years.

With the rise in popularity of smartphones, largely due to their easier affordability, the decline in feature phones has given a kick, especially in developed markets and urban markets of developing countries like India.

Feature phones have been left behind because of their connectivity over slow 2G network speeds, leaving users asking for more.

While urban populations in countries like India have got used to smartphones, the rural population is still forced to use slow phones with 2G connections for financial reasons.

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With a refundable security deposit of Rs.1,500 to keep the device, the JioPhone is a perfect deal for such rural users.

“JioPhone is a step towards reaching the next 100 million users. With an installed base of 400 million feature phones in India, the market is large enough for Jio to target feature phone users with disruptive offers and an effective price of rupees zero for a device, ”said Tarun Pathak, senior analyst, Mobile Devices and Ecosystems at Counterpoint Research said IANS.

The Reliance Jio announcement could prove to be a serious disruption to the cellphone industry and further increase the popularity of 4G feature phones - including as a secondary device in urban areas.

“The feature phone segment is still very active in India and nearly half a billion such phones will be sold in the next five years. The feature phone replacement cycle was typically four years, but JioPhone will now shorten that cycle and you will expect a lot of people to upgrade to the new VOLTE-enabled JioPhone, ”said Pathak.

Jio charges this money as a deposit to avoid possible misuse of the device. Beta testing of the Reliance 4G feature phone, known as the JioPhone, will begin on August 15th and pre-reservation for the device will begin on August 24th. The device will be delivered in September.

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For Narinder Kumar, an analyst at Cybermedia Research, the “world's cheapest feature phone” will certainly have an impact on the current market for 2G mobile phones and the entry-level segment for smartphones.

"First of all, JioPhone has greater potential for feature phones that will reach their end of life in the near future," Kumar told IANS.

(With inputs from IANS)