View from India: Feature phones are getting smarter

India is now the world’s second-largest smartphone market, but the latest feature phones are giving many customers just what they want.

With the gradual reduction in data tariffs and growing availability of affordable smartphones for consumers, the mobile broadband connection base is forecast to reach more than 670 million by 2020, according to the Mobile Economy India 2016 Report from GSMA Intelligence.

By this date, almost half of the total connections will run over mobile broadband networks. There is also an accelerating move to 4G, with the 4G connection base forecast to grow rapidly, from just 3 million at the end of 2015 to 280 million by 2020. India overtook the USA to become the world’s second largest smartphone market in the first half of last year, with an installed base of 275 million as of June 2016.

2016 saw a large-scale rollout of smartphones supporting 4G and now VoLTE and this is becoming more visible this year. This has led to a trend wherein Android smartphones are taking mobile usage to the next frontier with enhanced user experience.

Some of the 2017 smartphone launches include the Huawei P10, Samsung Galaxy S8, LG G6 and Xiaomi Mi 6. By and large these new offerings have better RAM qualities, enhanced internal storage, larger and high-definition displays and fingerprint scanners under the display (in some cases). Another value-add is that smartphones sport amazing camera clarity, making selfies Instagram-worthy. As for price points, smartphones start as low as Rs 5,000 (£60).

In March OnePlus, a global technology company, announced the ‘Best Smartphone Contest’ to celebrate the success of its flagship smartphone, the OnePlus 3T, as the best-rated smartphone in India with the highest rating of 4.4. The consumer ratings have been independently validated by Nielsen for all smartphones listed on Amazon with a minimum of 100 ratings on 1 March 2017.

The contest is a first-ever initiative of its kind and scale. The promotion campaign promises a fun-filled way for users to interact with the brand while participating for the grand prize of Rs 1 Crore (ten million rupees, £120,000), the largest prize ever offered by a brand. In addition to the prize money, several attractive incentives are up for grabs for thousands of lucky participants. OnePlus Star Amitabh Bachchan and OnePlus fan Rohan Joshi have come together to launch a series of unique activations including a quiz show where Mr Bachchan plays the role of contestant for the first time.

Besides smartphones a second trend has emerged this year: feature phones now pack in quite a punch. It’s a value-for-money proposition, and consumers are not embarrassed to carry a feature phone along with a smartphone. This is a volume business, as manufacturers showcase 4G-capable feature phones that will capture a sizeable share of the market by packaging newer features, upgraded cameras and improved battery life. This year, Lava International, a leading player in the mobile handset category, has launched a 4G VoLTE smart feature phone, which combines the durability and battery back of a feature phone with a smartphone experience.

Feature phones also got a boost with Nokia’s re-entry into the Indian market. “The overwhelming response we received for the Nokia 3310 is a testimony to the fact that there remains an immense demand for feature phones,” said Ajey Mehta, HMD Global vice president India. There is a base of consumers who are feature-phone loyalists and don’t want to upgrade to a smartphone because feature phones meet their needs of durability, ease of use and low cost of ownership.”

According to the Kantar IMRB & MMA survey titled ‘Feature Phone Usage and Behaviour Report [Overview] – India 2016-17’, over 85 per cent of the urban Indian population now owns a mobile phone. While smartphones get most of the attention, 56 per cent of this user base actually uses feature phones. It is a myth that feature-phone users are not affluent. Actually 75 per cent of the respondents are from the upper socio-economic classification. The study revealed that feature phones are also entertainment hubs. And one-in-three use their handsets for watching video and playing mobile games.

In other words feature phones do it all, fulfilling all needs of communication, entertainment and information search for their audience. The days of the feature phone are far from over, and any assumptions regarding their demise is premature – at least for now.

“Our research indicates that the feature-phone user is looking for a good-quality device that is durable, offers them ease of use and low cost of ownership. Towards this, we have focused on ensuring that our phones meet these needs of the consumer,” highlighted Mehta. The recently launched Nokia 150 comes with a polycarbonate shell making it a very durable device. Nokia 3310 is a modern take on a classic design but has added functionalities such as a better battery standby and camera. In addition, all the feature phones are supported by a ‘replacement guaranteed’ promise – which means that the consumers can get their feature phone replaced in case of any quality issues (except for water logging).

The company’s focus right now is to deliver exceptional hardware with an unbeatable OS experience. “When we ask a customer to consider a Nokia smartphone, we mean a premium quality handset that will always come with pure Android,” explained Mehta. The thrust is on providing a safe, clutter-free and up-to-date experience, for which the company is banking on partnerships with Google, Foxconn and Nokia.

India has always been an important market for Nokia. Recently, Trust Research Advisory ranked Nokia as the most trusted personal gadget brand in the country. The company is preparing to launch Nokia 3, Nokia 5 and Nokia 6 in the market.

Nokia has always been a ‘people’s brand’; it already has a significant presence in the feature phone industry. For smartphones, Nokia’s focus is on improving core, real life experiences by delivering great design, material and manufacturing innovation.  The brand combines stability, quality and reliability with strong design innovation to give consumer what they need without the clutter of a heavily skinned OS. The outcome is visualised to be the latest and best of Android on Nokia smartphones.

Coming to shopping, a large segment of urban India shops online, yet shopping (including mobile) in smaller towns is still led by ‘a real human touch’ approach. “We have enabled best of both the practices with our unique digital offline channel,” explains Amit Sharma, CEO and co-founder of ShopX, a digital offline platform which has brands like Karbonn, Gionee, Infocus on its platform along with aspirational brands like iPhones. “As a result, a large number of global brands have now come within the reach of customers based in Tier II and III towns in India. In addition, we have seen huge demands in categories like consumer electronics, especially in the mobile and accessories segment.

“Of the overall mobile phones sold on our platform, feature phones have been a dominant category. However, we are experiencing an increased traction in smartphone categories wherein the brands such as iPhone carry a high aspirational value,” he added.

ShopX experienced stupendous response when it introduced iPhones in January 2017, with iPhone 5s being the most demanded SKU. The launch aimed to bring a premium brand like Apple iPhone to the unserved 600 million middle-income customers. ShopX noted iPhone 5S was the highest demanded product type amongst all smartphones sold on the platform. Over 70 per cent of shipments were for Apple iPhone 5S, though higher valued iPhone 7 and 7 Plus were also sold.

Fulfilling this need of consumers in India’s Tier 2 and 3 towns was the primary reason for the company to enhance the reach and availability of iPhones though its platform. This is a strong indication of growing preference for famous marquee brands in these towns, which is being met by a growing ecommerce market.

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