Despite falling sales, Reliance remains convinced of India’s love for JioPhone

Slowdown in sales.
Slowdown in sales.
Image: REUTERS/Amit Dave
We may earn a commission from links on this page.

Reliance Jio, one of India’s largest telecom firms by subscriber base, is battling a slowdown in demand for its flagship device, the JioPhone.

It witnessed a 56% annual drop in shipments in the April-June quarter this year as compared to the same period in 2018, data from market research firm CyberMedia Research (CMR) show.

Within a year of its 2017 launch, the JioPhone had become the most popular feature phone in the Indian market. “From commanding close to 50% of feature phone units a year ago, Jio has seen its share of shipments almost halve to 28% by April-June quarter in 2019,” research head of CMR group, Prabhu Ram told Quartz. “The decline in Jio’s shipments can be attributed to its inventory pile-up.”

The entry of other players with an affordable price range in the feature phone segment is another reason behind its fall, feel experts.

“The user-base of feature phones has been shifting to brands like Samsung, iTel, and Lava, among others. There is a pricing shift, with rural customers upgrading in the Rs6,000 ($84.2)-Rs8,000 and Rs10,000-Rs12,000 range as demand for premium specification grows,” said Anshika Jain, analyst at Hong-Kong based Counterpoint Research.

Reliance Jio did not respond to queries from Quartz on the decline in its sales.

The lower demand for JioPhone is beginning to affect the Indian feature phone market, which declined sharply by around 39% in April-June quarter in 2019 on a year-on-year (YoY) basis, according to Counterpoint.

“The feature phone demand is back to the 2017 (pre-Jiophone) level but it remains to be seen if the entry-level smartphones are able to attract the users in coming quarters,” Jain said.” However, for Jio, the situation is likely to remain the same for a few more months.”

Losing ground? Not really

Unfazed by falling shipments, Reliance Jio plans to launch its latest handset model during the upcoming annual general meeting of parent firm, Reliance Industries, on Aug. 12, a person aware of the development told Quartz, on the condition of anonymity.

Reports say this model will come with a 5-inch touch screen display, 2GB RAM, and 64GB of internal expandable storage. “The Jio Phone 3 will feature a 5-megapixel camera at the back, and a 2-megapixel selfie camera up front,” a report claimed.