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Over 370 million smart feature phones expected to sell in next three years: Counterpoint

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Sales of smart feature phones could cross the hundred million mark in the next three years, the Hong-Kong based Counterpoint Research says in its latest study.

A sales person displays features of JioPhone. Reuters

As per the latest report published by the research firm, nearly 370 million smartphones are expected to be sold across the world in the next three years. Counterpoint’s Research Director Neil Shah stated that smart feature phone sales represent a $28 bn revenue opportunity in the mentioned period.

“This will be enabled by a potential of more than 300 million smart feature phone users globally by the end of 2021. Software & Services alone will contribute to 71 percent of this near- to mid-term revenue opportunity, or around $20 billion,” Shah noted in the report.

While a smart feature phone is said to serve as a “perfect middle ground” between a traditional feature phone and smartphone, first-time users seem to prefer a feature phone form-factor with a simple interface. As per the Counterpoint report, the literacy rate in the emerging countries like India and Africa is still below 70 per cent and while shifting to a smartphone is a “steep learning curve” in these countries, smart feature phone users amount to nearly two billion worldwide.

Counterpoint estimates global smart seature phone opportunity revenues.

“The global smart feature phone demand grew 252 percent year-on-year in 2018 – albeit from a low base, contributing roughly 16 percent of the total feature phone volumes. While India is the biggest contributor to this demand, major markets that have driven smart feature phone sales to include the United States, United Kingdom, South East Asia and Africa. We estimate that smart feature phones will cross more than half of global feature phone volumes by 2021,” Tarun Pathak, Associate Director at Counterpoint Research stated.

According to the report, the KaiOS software is taken to be one of the key components in driving the growth of smart feature phones. The native support for 3G/4G network, curated app and service ecosystem are claimed to be the primary factor of KaiOS platform’s popularity.

Counterpoint Research notes Reliance Jio to be one of the fastest growing company in this segment. The telecom operator managed to garner tens of millions of 2G feature phone to its 4G network with the KaiOS powered 4G feature phone, as per the report. Counterpoint in its research revealed that out of over 100 million subscribers that Jio added since the Jio Phone debut in 2017, the 4G smart feature phone contributes to nearly half of those “net additions.”

The research firm in its recent report mentioned that Reliance Jio captured a massive 38 per cent share in the feature phone market in the last quarter of 2018.

Counterpoint Research Analyst Varun Mishra highlighting the major benefits of 4G smart feature phones said, “Perhaps the biggest benefit of 4G smart feature phone adoption for operators is the opportunity to accelerate the adoption of more efficient technologies with much lower cost/bit metrics with users on 4G/5G networks than on 2G/3G networks. Further, operators have the potential to drive voice as well as data revenues and, in the process, increase the 4G ARPU. It will help operators achieve a return on 4G equipment and network rollouts. We estimate close to $15 Billion in connectivity service revenues will be generated, cumulatively, between 2019 and 2021.”

Disclaimer: Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd.

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