Jio’s $54 smartphone will help reshape the Indian tech market

  • Jio is reportedly gearing up to sell 150–200 million $54 smartphones in India.
  • It  hopes to entice upgrades from customers on 2G devices, which will expand the target audience for Jio’s push into digital services.
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Indian telecom giant Jio has started working with at least two domestic manufacturers to secure capacity for 150–200 million smartphones, according to Bloomberg.

internet users in India

Jio’s $54 smartphone will upend the Indian market.

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Over the proceeding two years, Jio reportedly intends to sell the Android smartphones for 4,000 rupees ($54), a price point the company hopes would entice upgrades from a significant portion of the estimated 350 million basic or feature phone users in India who still rely on 2G service. Jio’s lofty shipment goal would remake the company into a top global smartphone vendor—for context, in the entirety of 2019, only Samsung and Huawei shipped more than 200 million devices, according to Canalys.

By shifting millions of Indian consumers from 2G devices to smartphones, Jio will be better positioned to transform into a digital services provider. In the first half of 2020, Jio raised over $20 billion by selling 33% in equity to the likes of Facebook, Google, Intel, the Saudi Arabian sovereign wealth fund, and Silver Lake Partners.

While Jio has already transformed into the world’s second-largest network operator by subscribers, the 2020 round of funding was motivated by Jio’s push into digital services. Jio is working with Facebook to develop a super app for the Indian market which will serve as the focal point of these efforts—the app will reportedly include payments, gaming, ecommerce, and social media services, building on the immense popularity of Facebook’s WhatsApp, which has 400 million users in India.

India is widely expected to experience the largest increase of any country in adding internet users over the coming years, as only half of the country’s 1.3 billion residents currently have internet access, per eMarketer estimates. The $54 smartphone will help Jio accelerate the growth of India’s internet-connected user base, in turn expanding the target audience for the company’s 4G wireless network and digital services. Jio could even give preferential treatment to its digital services by not charging for data consumed by the super app.

If Jio manages to sell over 150 million smartphones, India could also have an easier time cutting ties with the China-based smartphone vendors that currently dominate the market. Under Prime Minister Narendra Modi’s Self-Reliant India initiative, the Indian government has supported India-based companies through nationalist economic policies.

And following a deadly border skirmish between Indian and Chinese troops in June 2020, India has attempted to disentangle its tech economy from China’s. But over 75% of smartphones shipped in India for Q2 2020 came from China-based vendors Xiaomi, Vivo, Oppo, and Realme, according to Canalys. India likely hasn’t limited the domestic operations of Chinese smartphone vendors because doing so would disrupt the country’s digitization trajectory. If Jio proves to be a formidable domestic alternative, however, the Indian government will have greater leeway to enact its nationalist economic plan, pushing foreign vendors out of the market. 

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