Getting ready for the great Indian switch

India’s mobile phone landscape is undergoing a crucial shift. Once ubiquitous feature phones are experiencing a resurgence in demand for specific models, while smartphone adoption is being driven by powerful digital tailwinds. As the digital era unfolds, the growing affordability of smartphones is enabling access of the majority to the digital economy, driving a migration from feature phones to smartphones.

CyberMedia Research (CMR) insights reveal that while feature phones remain popular for their practicality, evolving consumer needs and the lure of a richer digital experience are propelling the transition towards smartphones. However, feature phones are not obsolete; they are evolving to offer digital services like weather updates, news, and social media access. Despite their advantages, feature phones face limitations such as poor camera quality, limited app availability, and restricted internet access, prompting many users to consider switching to smartphones.

Here is a ringside view of the ongoing dynamic digital transformation shaping the India of tomorrow, the emerging trends and their implications for the future.

Shifting Tides: Feature Phones Vs. Smartphones

The CMR insight on the mobile phone market illustrates a noteworthy 52% year-on-year (YoY) growth in the overall feature phone market during Q4 2023. This surge is primarily fuelled by the popularity of 4G feature phones, which offset a 12% decline in older 2G models. However, this resurgence masks a deeper trend: a migration towards smartphones driven by digital transformation.

While feature phones retain a loyal user base who value their practicality—long battery life, ease of use, affordability—the winds of digital transformation are propelling a migration towards smartphones.

The Affordability Revolution: Democratising Smartphones

A pivotal factor in this transition is the increasing affordability of smartphones, particularly 4G and even 5G models priced under Rs 10,000. This affordability revolution is unlocking a world of possibilities for budget-conscious consumers, bringing them into the fold of the digital economy.

Feature Phones Evolve,

but Limitations Remain

A recent survey of over 2,000 mobile phone users across major cities and towns of urban and aspirational India conducted by CMR indicates that feature phones, while primarily used for calls (87%), alarms (72%), and texting (62%), are no longer confined to these basic functionalities.

The survey highlights that a growing number of users (one-third) are utilising apps like weather (47%), news (34%), and even social media (24%) on these devices. This reveals the evolving needs of the feature phone segment; a desire for a taste of the digital world while retaining the practicality they cherish.

Feature phones, long considered a reliable and affordable mainstay, are seeing a shift in consumer preferences. They remain a go-to option for many owing to their practicality; 78% prioritise long battery life, 74% value ease of use, and 57% find affordability critical. In addition, the availability of digital payments is also enabling users to participate in India’s growing digital economy.

Yet, the feature phones have limitations. These, include amongst others, particularly poor camera quality (62% consider this a drawback), lack of advanced apps (56% see this as a limitation), and restricted internet access (53% find this frustrating).

The study also points out that a significant portion or 75% of feature phone users are inclined towards smartphones, including the new wave of affordable 4G and 5G smartphones in the price range of Rs 6,000- 8,000, that offer a wider range of functionalities.

Samsung enjoys the highest brand recognition (74%) for feature phones. However, Itel emerges as the champion when it comes to user conversion. Their impressive conversion rates from awareness to trial and from trial to loyal users showcase their ability to capture the feature phone market. Itel’s dominance extends to overall satisfaction, brand loyalty, and positive word-of-mouth.

A Lucrative Market for Feature-Rich, Affordable Smartphones

India’s mobile phone market is poised for a significant transformation. Feature phones, while valued for their practicality, are facing an existential challenge from affordable smartphones. Consumers are yearning for a more feature-rich mobile experience, one that goes beyond basic communication.

Brands that can deliver affordable smartphones with powerful cameras and other specs are well-positioned to capitalise on this exciting shift.

The confluence of affordability and digital aspirations promises to propel India’s mobile phone market towards a future of inclusivity and connectivity. Going ahead, it will be exciting to witness how this transformation unfolds.

By Prabhu Ram

The author is the Head of the Industry Intelligence Group of CyberMedia Research (CMR).

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