FP-SP Battle Hots up as Telcos Go Gaga over Devices

After data war, Reliance Jio (RJio) triggered the devices war when it launched its Internet-enabled feature phone at a refundable price of Rs 1,500. Not only it fired immense competition among the handset vendors, but telecom operators also brainstormed to counter the attack in their boardrooms and tied up with a plethora of device manufacturers to roll out affordable 4G smartphones.

The RJio phones were targeted to bridge the digital divide in the country and analysts also believed that the phones would delay the waning of feature phones, which was taking place at a fair pace over the past few years. However, with budget 4G smartphones roll out by telecom operators, the million dollar question lies—is the extinction of feature phones near or 4G smartphones have to work hard to wipe out feature phones segment?

The feature phone today holds about 54% of the overall handset market as against 97% in the year 2008, thanks to the declining prices of smartphones. Analysts are divided over the recent developments as one school of thought believes that 4G feature phones would hardly create an impact over the masses as they are all about changing the network, while with time people want to evolve and want to upgrade to a smartphone.

They say in the case of RJio phones, conditions like “down payment of $40 and three year period are hurdles since most change phones every two years, however, expect Airtel’s new smartphones to compete effectively with Jio Phone in the high-end feature phone user segment.”

Country’s top telco Bharti Airtel collaborated with device manufacturers, Karbonn, Celkon,etc, to unveil 4G smartphones at affordable prices, starting at Rs 1,399. Vodafone India partnered with Micromax to launch 4G smartphone --Bharat 2 Ultra, priced at Rs 999. In fact, Vodafone and Idea, both the companies are on the last leg of their merger, are in talks with handset manufacturers to roll out cheap 4G smartphones.

Meanwhile, analysts are also of the view that one should consider that which phone would work in the long-run.

While feature phones have a longer shelf life, users change smartphones over a span of two years. At the same time, apps ecosystem is also a major factor to decide that which phone would win in the long-run. The staple apps Facebook and Whatsapp are not present in RJio phones, which give an upper hand to other smartphones.

Having said all, at the end the phone, whether smartphone or feature phone, which customers would find value for money will win the race and after intense battle in the handset arena would also change the fate of feature phones and smartphones.