Indian phones: Can they take on Chinese brands?
₹1,000. Other Indian brands also plan to launch inexpensive smartphones. After having lost out to Chinese brands nearly a decade ago, can the Indian brands cut it in today’s market? Mint decodes.
Why did Indian brands lose out? The advent of Xiaomi in India nearly a decade ago saw the start of a price war among brands. With reducing component prices in the supply chain, Chinese brands undercut device pricing to gain market share. Indian brands struggled to match the scale of Xiaomi, Oppo and Korea’s Samsung.
While Samsung, thanks to its global multi-industry presence and long-standing India operations, could rival the Chinese, Indian brands lost out. They could never match the features the Chinese offered on their phones—at less than half the price of a similar device produced by Indian brands. How is Jio selling phones at under ₹1k? Industry experts said that Jio’s cost of making the Jio Bharat 4G feature-phone is likely to be around ₹850-900.
This is within the average price range of a feature-phone in India today. However, most brands sell their feature-phones at about ₹1,200. With marketing and other indirect costs factored in, Jio is unlikely to make much directly from Bharat 4G.
However, Jio could justify this with its bundled telecom plan and other services such as payments and content streaming. Industry estimates suggest that Jio could make around ₹5,000 per phone in four years, which is the average lifespan of a feature phone. What does it imply for India’s telcos? India’s base of feature-phone users is estimated to be 250-330 million.
These phones are mostly 2G-enabled. Bharti Airtel holds the biggest chunk of this user base. Vodafone Idea and BSNL are also in this space.
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