Sources familiar with the matter have said that Reliance Industries may launch its affordable Reliance Jio smartphone before Diwali. as the Covid-19 situation improves and demand likely peaks by then.
Reliance Jio Smartphone Coming Soon
The sources, cited by ET, said that the smartphone is undergoing tests at present. The manufacturing facilities of Wingtech Mobiles, Dixon Technologies, UTL Neolyncs and Flextronics Technologies are testing the Reliance Jio smartphone. Further, the sources said that the phone has passed the R&D stage. Now, RIL is looking to sourcing components from component makers like Tata Electronics.
Most likely, the smartphone will come at below $50. Moreover, Reliance Jio will open pre-bookings in the near future.
A top executive said that while Google‘s part was to optimize the software, it will fall onto Wingtech, a Chinese ODM, to actually design the hardware. Likely, the rest will do the assembly.
Neil Shah, partner at Counterpoint Research, said that the ideal time for launch was the festive season around Diwali. Also, JP Morgan said that Reliance is likely to only announce the specs and pricing on its upcoming AGM. The brokerage firm said that a rollout is some time away for the same.
How is Reliance Managing to Launch a Smartphone at $50?
Brokerage firm UBS said that a $50 smartphone may be rather difficult to get to, but some compromise in components could reduce the bill to $65-$70. Google and Reliance Jio can only cut so many costs, even if they manage to develop a lighter operating system. They can cut around $5 in display and around $4 in memory, that’s all. That is what will make a smartphone priced at $50 difficult to achieve, UBS said.
“That said, Jio could keep the retail price at $50 in the larger interest of 4G migration,” UBS added. Basically, it comes down to Reliance at the end to decide the pricing; whether it makes a profit or not is a different matter. This pricing translates in Jio bearing a subsidy cost of $2-$4 billion. UBS said that the improved subscriber mix and higher market share can cover the same in about 24 months. It might not be a bad thing for Reliance, after all. The company has already benefited massively from one gamble. For one, the device can add 30-42 million subscribers to Jio in the next two-three years.
This will also have dividends for the telecom sector as a whole. UBS estimates that the device will accelerate India’s 4G penetration by 15% and add 5-10% to sector average revenues by FY24. Of course, the added sector revenues will go to Reliance Jio, but still it is progress.
Right now, to make up for the pre-booking, RIL have placed an order for 70,000-80,000 handsets. Most likely, the device will only be available on JioMart and Reliance Digital stores first. As was the case with JioPhone, Reliance Jio smartphone will also come with a bundled Jio SIM and lucrative recharge offers.
Jio and Google – Making India Digital
The companies are developing the smartphone as a part of a two-part deal. As the first part, Google picked up 7.73% stake in Jio Platforms, the parent of Reliance Jio, last June for Rs 33,737 crore.
As the second part, Google and Reliance Jio are developing an entry-level affordable smartphone. Google will provide optimizations to the Android OS and the Play Store. The device will be 4G-ready and can potentially support 5G when the network rolls out.