Why Have People Stopped Buying Reliance JioPhone in India?

Reliance made waves with its JioPhone series in 2017, but people seem to have moved to other options in 2019.

JioPhone supports apps like WhatsApp and YouTube.

(Photo: The Quint)

Back in January last year, Reliance JioPhone was credited with rebooting the ailing feature phone market in India. More than a year and half later, the unique device is having a hard time, finding takers.

This has been illustrated in the Q2 2019 report by Counterpoint, which shows JioPhone’s market share has dipped from 47 percent (Q2 2018) to 28 percent, one year later.

The demand for feature phones is back to the 2017 (pre-Jiophone) level, and lack of demand for JioPhone is to blame for most of this decline.

The feature phone market is not declining in general, there’s a drop in market share of JioPhone, because they have huge unsold inventory finding no takers. 

Anshika Jain, Research Analyst, Counterpoint 

(Photo: Counterpoint report)

So, what’s the reason behind consumers looking at other devices besides the JioPhone?

Apparently, people were forced to look at other options because of the increasing price of the JioPhone. While this didn’t affect the demand for JioPhone (priced at Rs 1,500) initially, JioPhone 2 (Rs 2,999) did not meet the company’s expectations.

If you talk about JioPhone, most buyers were shifting from basic 2G feature phones to 4G for the same price, bundled with pocket-friendly data plans. However, with JioPhone 2, buyers weren’t keen on the device mostly because of its pricing. 

Anshika Jain, Research Analyst, Counterpoint 

The form factor of the JioPhone 2 also didn’t appeal to buyers, who would instead upgrade to a smartphone from brands like Lava that cost around Rs 3,000.

Counterpoint further points out that JioPhone 2 made less than one percent of the total JioPhone shipments in Q2 2019. 

JioPhone customers at Gandhinagar.(Photo: Reliance Jio)

And because of lack of interest in JioPhone, brands like Samsung, Lava and iTel were able to re-capture share in the sub-Rs 1,000 segment during the quarter.

People in rural areas just need basic features. If they want to use these apps, they would switch to smartphones instead of JioPhone 2. Even Rs 1,500 is a big number for buyers in these regions, and that has played a part in less sales of JioPhone.

Anshika Jain, Research Analyst, Counterpoint 

We even spoke to few offline sellers to understand what a feature phone buyer wants these days.

Most of them said that phones under Rs 2,000 with a long battery life and loud speaker are hot-sellers, and this somewhat implies that not all consumers in this segment are keen on WhatsApp or watching videos on YouTube either.

Having said that, nobody’s saying this is the end of JioPhone. After all, it still leads the feature phone segment. But if Reliance Jio is keen on arresting its decline in the market, a new and refreshed product, which doesn’t cost more than Rs 2,000 is much needed for reboot of the brand.