The sale of feature phones in the Indian market is on an upward swing. And standing testimony to its growing popularity is the launch of another feature phone by HMD Global, the makers of Nokia-branded phones. At the recently concluded Mobile World Congress, held in Barcelona, the talking point was the nostalgia that Nokia brought with its 8110 phone. The old 1999 ‘banana phone’ has been now been reintroduced as 8110 4G phone, which can access an app store for favourites like Google Assistant, Google Maps, Google Search, Gmail, Facebook and Twitter. This was Nokia’s second repackaged offering after the iconic 3310 that the company launched last year.
As per market research firm Counterpoint Research, India’s overall mobile shipments grew by 37% in the fourth quarter of 2017, with feature phones growing at an ‘astonishing’ 55% in that period. Feature phones essentially have features such as the ability to access the internet, but they lack the advanced functionality of smartphones. While the smartphone shipment grew merely by 12%, feature phones have made an astounding comeback in the Indian market.
“The market for feature phones in India has been growing substantially in the last two years. The overall shipment of feature phones in India in 2017 was at 64%, while in 2016 the number was at 58%,” says Shobhit Srivastava, research analyst, Counterpoint Research. “The number is going to go up further in the current quarter, as is evident from the preliminary figures,” he adds.
Globally, too, the smartphone market has been facing a slump. Global sales of smartphones to end users totaled nearly 408 million units in the fourth quarter of 2017, a 5.6% decline over the fourth quarter of 2016, as per research and advisory firm Gartner. This is the first year-on-year decline since Gartner started tracking the global smartphone market in 2004.
There are several factors that have contributed to the popularity of feature phones. Longer battery life and lower cost being the key reasons that make it more appealing in tier-II, tier-III and rural areas. Most feature phones are priced anywhere between `500 and `2,000. For an urban user, its long battery life appeals as a companion phone or a phone to be used during ‘digital detox’.
“Given our socio-economic milieu, feature phones offer certain inherent advantages over smartphones,” says Ashish Bhatia, Delhi-based technology writer. “They are far more affordable. As these devices are not very feature-rich, they’re easier to use for the non-tech savvy. There’s no denying that feature phones offer better battery life. This can be a major factor in areas where electricity supply is an issue,” he adds.
The lackluster quality of low-cost smartphones has further propelled the popularity of feature phones. “The sale of low-cost smartphones have gone down considerably. The low-end smartphones priced around `5,000 are not meeting consumer expectations,” says Anshul Gupta, research director, Gartner. “So upgrades from feature phones to smartphones have slowed down due to a lack of quality ultra-low-cost smartphones and users preferring to buy quality feature phones,” he adds.
Another disruptor in the mobile phone market is Reliance Jio. It has captured the lion’s market share through its attractive offerings.
“Jio’s strategy worked beautifully. First they introduced a low-cost smartphone and then to capture the feature phone market, they launched JioPhone 4G last year. This way even when feature phone users upgrade, they will not leave Jio,” says Srivastava. As per Counterpoint Research data, Jio Phone was the top feature phone brand in the quarter that ended in December by shipments, with a 26% market share for devices under Rs 2,000. Jio’s Rs 49 prepaid recharge plan offers 1GB of 4G data for a period of 28 days for users of JioPhone.
Feature phone players in India are predicting better sales in 2018. “We will be closing FY18 with 30% annual growth rate,” says Victor Su, director, FORME mobiles India. Based in China, FORME operates in India, the Middle East, Africa, Southeast Asia, Europe and other countries and regions.
“We are going to launch an extensive portfolio of internet-enabled feature phones especially designed for the Indian market,” he adds.
New models and several offers for feature phones are also in the offing. For instance, Indian feature phone brand Intex has adopted the ‘bundling’ strategy by partnering with Vodafone and Airtel. “For us, the Intex feature phones account for over 60% of the product portfolio generating 35% to 40% mobile business revenue. Intex had launched 18 feature phone models in CY2017,” says Nidhi Markanday, director, Intex Technologies.
The company launched several feature phones like the Navratna Series having a price range from `500 to `1,300 for the 2G series. “In fact, our Ultra 4000i comes with innovative practical features such as a selfie camera in a feature phone,” she adds.