Sunday, Nov 27, 2022
Outlook Business

Will Jio Be The Biggest Beneficiary If Government Bans Chinese Smartphones Below Rs 12,000?

If the government does decide to ban budget Chinese smartphones, the JioPhone 5G might stand a good chance at dominating the 5G services market


Reports of the Indian government looking to restrict the sale of Chinese smartphones under Rs 12,000 to kick-start its domestic industry might come as a big bonus for the country’s biggest telecom player, Reliance Jio.  

This comes at a time when the news of Mukesh Ambani-led Reliance Jio, which emerged as the highest bidder in the 5G spectrum auction last week, planning to launch the JioPhone 5G by the end of this year is doing the rounds. 

The ban reports, if true, would give Jio an edge over its Chinese counterparts like Vivo, Xiaomi, Motorola, and Oppo that have already launched budget smartphones that support 5G services in the country. That means if the government does decide to ban Chinese smartphones below Rs 12,000, the JioPhone 5G might have a good chance at dominating the 5G services market in India. 

Chinese Empire Under Attack

Ever since Chinese smartphones have entered India, they have dominated the market with their low price range of Rs 10,000 to Rs 15,000. As per a report by Counterpoint Research Market, in Q1 2022, the Chinese brands held a 74% share of the domestic smartphone market in India, with Xiaomi leading the market with a 23 per cent share, followed by Realme (16 per cent), Vivo (15 per cent) and Oppo (9 per cent).  Samsung had a 20 per cent share and brands captured 17 per cent.

In the June quarter of this year, three-fourths sales in the domestic smartphone market accounted for mobile phones under $150, with the Chinese smartphones accounting for up to 80 per cent of these sales. Compared to last fiscal, the domestic smartphone market grew by 2 per cent in the current fiscal as vendors shipped 38 million in the country. While Xiaomi shipped a record 8 million units in the June quarter, Samsung shipped 6.9 million units, according to a report by Canalys

Some newly launched Chinese smartphones also support 5G services at a reasonably lower price band as compared to the other brands. For instance, the Vivo Z6 5G some in at Rs 22,590, Vivo V22 Pro at Rs 21,858, Xiaomi Redmi Note 11 Pro Plus 5G at Rs 18,999, Xiaomi Mi 11j at Rs 21,779, Xiaomi Redmi Note 10T at Rs 10,749, and Xiaomi Red Note 11T 5G at Rs 15,499. 

Trouble has been brewing for Chinese smartphones for a while now with the latest speculation coming months after the Enforcement Directorate (ED) raided Vivo’s office in a money laundering case and tax evasion on income of about Rs 6,500 crore. Oppo is also being probed by the Directorate of Revenue Intelligence for custom duty evasion amounting to Rs 4,389. In May this year, ED had seized Rs 5,551 crore from Xiaomi India for violating the Foreign Exchange Management Act. 

Jio Eyes Domination

With its jittery Chinese counterparts on the back foot, Jio is gearing up to grab the opportunity with the launch of its JioPhone 5G.

While not much is known, a Hindustan Times report suggests that it can be launched at an affordable price range of Rs 9,000 to Rs 12,000. The phone is likely to come with a 6.5-inch IPS LCD display with HD plus a resolution of 1,600X720 pixels and is said to be powered by an octa-core Qualcomm Snapdragon 480 5G processor. It may have a 4 GB RAM, 32 GB user-expandable storage and a dual camera, the report adds. 

A major reason behind Chinese companies dominating the Indian market is the fact that they would launch new products with upgraded features every few months. Jio seems to be deploying the same strategy as it looks to capture the telecommunication market by now entering the smartphone space backed by its 5G force. 

When Reliance Industries launched Jio services in India in 2017, the company first entered the handset market by launching the simple JioPhone which supported 2G services. With a small screen and numeric pad, this Jio mobile phone has a 2.4-inch QVGA display, 512 MB RAM, 4 GB storage, a 2 MP rear camera, a VGA front camera sensor and a 2,000 mAh battery. The mobile phone was available at an affordable price of Rs 1,999 and became an instant hit along with the record-breaking sales of Jio SIM cards that year. 

In 2018, the company launched the JioPhone 2 which was an upgraded version of the JioPhone with a QWERTY keypad. This phone supported 4G services and had dual SIM card slots, supported VoLTE, VoWiFi, NFC, GPS, Bluetooth, had torchlight and FM radio. The phone also had the option of inserting an SD card as was common among its peers. This phone was priced at Rs 2,999. 

Last year, in partnership with Google, the telecom major launched its smartphone, JioPhone Next, at Rs 6,499. Powered by a quad-core Qualcomm 215 processor, the phone runs on Pragati OS which Google calls an “optimized version of Android”. The phone came with several upgraded specifications such as a 5.45-inch HD + resolution (720X1440), corning gorilla glass 3 with anti-fingering coating, Qualcomm Snapdragon QM-215 processor, a 2 GB RAM, a 32 GB storage that can be expanded to 512 GB, a 13 MP rear camera, 8 MP front camera, 3,500 mAh battery, and dual SIM cards slots.

With its next phone, the JioPhone 5G, lined up for launch against the backdrop of the dominant Chinese players in that range under attack while it is building its 5G fortress, Jio is placed at a very interesting position in the telecom race.