JioPhone Creates A New Category Of ‘Fusion’ Phones, Says CMR India

Recently, DeCode spoke about how the JioPhone has been capturing market share at the expense of feature phones. With their superior product quality and unbeatable data plans, the masses started to upgrade their devices. App makers took note, too, and Google and Facebook are both to soon launch their flagship apps for these phones. Now, CMR India says “JioPhone has successfully been able to create a new category of fusion phones in India’

The report makes for interesting reading. According to CMR India’s Mobile Handset Market Review Report for Q2 2018

● 1 in 4 mobile handsets are now manufactured in India at Completely Knocked Down (CKD) level.

● JioPhone led the overall shipments contributing 27% across Feature phones, Fusion phones and Smartphones. This was followed by Samsung.

● Smartphones above Rs 4,000 being shipped with 4G connectivity. LTE handsets grew 104% compared to last year same period.

According to CMR lead analyst, Narinder Kumar, the opportunity spotted by Jio in the fusion phone category has not gone unnoticed. The 4G operator’s near monopoly is unlikely to go long unchallenged. “Going forward, it is expected that other brands shall also explore Fusion phones and excite the consumers with enriched smart capabilities within the feature phone form factor. However, the success would like in how it penetrates into the open market, albeit telecom operators supporting the initiative,” Narinder concluded. This is likely to play right into the hands of Jio who will likely be the biggest benefactor as new subscribers upgrade to 4G handsets at lower price points.

Additional CMR 2Q 2018 Highlights

● Smartphones grew 17% on annual comparison driven by strong performance registered by brands including Honor, Realme and Vivo. The other factor was that 2Q 2017, had relatively done below the quarterly average as the segment was taken aback by demonetization.

● 28% decline was registered in feature phone category YoY, which is being taken by Fusion phones.

● Reliance Retail led the overall shipments with 27% market share across segments during 2Q 2018. This was followed by Samsung.

“In 2Q 2018, with the ushering in of the CKD level manufacturing, there are two broad trends underlining short-term turbulence. These include, the impact of Jio’s disruptive Monsoon offer leading to erratic demand projection estimations for all major handset brands, and secondly, the capabilities of smaller players to switch to CKD manufacturing and maintain production levels with their own SMT lines.” — Prabhu Ram, Head — Industry Intelligence Group (IIG), CMR

“2Q 2018 saw the arrival of Fusion phones as a distinct category. Though it is primarily driven by JioPhone, Indian brands like Micromax and Lava are also shipping in smaller quantities.” — Narinder Kumar

Another point that seems to be playing in favour of consumers is the fact that as more and more Indians get their hands on 4G devices with VoLTE calling, they also switch to plans with free call facilities. This is not likely to be a good sign for the balance sheets of the incumbent telecom operators — Airtel, Vodafone, and Idea — who depend heavily on these revenues. This shift is being accelerated with the growing acceptance of Fusion phones.