Over a billion feature phones to be sold in next 3 years: Report

By Xite - March 18, 2019
jio-phone
While most of the users still cannot afford a 4G smartphone, therefore, operators and the mobile industry players need to offer 4G VoLTE feature phones and move users to the more efficient 4G network.

While the smartphone market contracted for the first time in 2018, the feature phone market has continued to grow over the last three years. According to a report by Counterpoint Research, in 2019, over 400 million feature phones will be sold globally. Further, the feature phone shipments are expected to cross one billion units by 2021.

‘India and the Middle East Africa region will drive the growth of the global feature phone market by capturing nearly three-quarter of the market share in 2019. India and the Middle East Africa region will see cumulative shipments of around 800 million feature phones out of more than one billion global feature phone shipments over the next three years. Globally, the feature phone segment is forecast to generate around $16 billion cumulatively in wholesale hardware revenues over the next three years,’ said Peter Richardson, Research Director at Counterpoint Research.

While India remains the largest market in terms of feature phone volumes, it is closely followed by Bangladesh and Nigeria. In Africa, growth is led by brands like itel and TECNO.

Much of the growth of feature phones in India has been driven by the revival of the Nokia feature phones and the popularity of the Jio Phone, a smart feature phone which packs a chipset and an operating system that can support sophisticated smartphone-like features in a traditional feature phone form-factor.

Thanks to the Mukesh Ambani’s Reliance Jio network, Indian consumers now enjoy the cheapest mobile data globally with 1GB costing Rs 18.5 as compared to the global average of Rs 600 per GB, said a study by price comparison site Cable.co.uk.

The Jio Phone uses KaiOS as the operating system. KaiOS has also been expanding its reach in Africa. At the recently held Mobile World Congress in Barcelona, KaiOS announced partnerships with African operator Orange to launch KaiOS-powered smart feature phones priced at $20 across 16 countries in Africa and the Middle East.

There are several reasons why feature phones are the preferred mobile phone in many markets globally, despite the tremendous adoption of smartphones. An important factor is affordability. The bottom of the pyramid population across the world simply cannot afford a smartphone.

‘There are more than three billion people across the world who live on an income of less than $2.50 per day. This segment can neither afford a smartphone nor the data services demanded by the growing advancement in smartphone use-cases. Thus, a feature phone, coupled with basic mobile services has been the go-to offering for these users to communicate and connect. Most of these users are prevalent across Africa, parts of Asia and Latin America, added Tarun Pathak, Associate Director at Counterpoint Research.

There is also a business case for network operators to push feature phones. In most markets, network operators want customers to upgrade from 2G/3G to 4G networks. Counterpoint Research believes the rise of 4G feature phones will be one of the key trends moving forward which will allow the feature phone segment to remain relatively resilient in the medium term.

Further, there are also several use cases that are driving the sales of feature phones. For example, industry segments like construction require rugged devices with technologies like PTT (Push-To-Talk) to cope with the hostile environment. Feature phones offer a viable alternative for this segment.

Similarly, there is also a need for longer battery life. Varun Mishra, Research Analyst at Counterpoint Research explains, “The emerging markets of India and Nigeria have the greatest number of people without access to electricity. However, the phone remains an important part of people’s lives in these regions as well. Amid the dearth of electricity, in some cases, the user is dependent on public charging stations (shops giving facilities to charge phones in return for a payment). Long battery life becomes crucial in such situations.”

Counterpoint Research believes that markets in Africa, especially Kenya, Ethiopia, and Tanzania have the highest potential for 4G feature phones. In terms of the total addressable market opportunity, India, Bangladesh, Nigeria, Pakistan, and South Africa remain the key markets.

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