Why the Non-Android JioPhone Still Makes Sense for RIL
Android is not really an option
In the past few weeks, there were reports in the media that Jio was planning to discontinue the production of the JioPhone and shift to an Android-based smartphone. Jio has since denied those reports and made clear its intention of continuing the JioPhone. However, there seemed to be a number of people on social media who clearly wanted Jio to produce an Android device and abandon the JioPhone.
The JioPhone, in my opinion, is a very capable device and the only thing that Jio needs to do here is to increase production capacity. I also think that it would be economically unviable for Jio to be able to produce an Android-based device at this point in time. Finally, I feel that the JioPhone should not be looked through the lens of a smartphone when it is meant for people who have never used a smartphone.
The demand for the JioPhone exists
The factor that primarily decides whether a product is a hit or a flop is the demand that surrounds it. And in case of Jio Phone, the demand definitely seems to exist. The initial plan was to open pre-orders for JioPhone on August 24 and allow anyone to book a device. However, the demand for the phone was so high that Jio had to shut pre-bookings in less than 12 hours of starting it.
Within the 12 hour period itself, Jio has estimated that pre-bookings of the JioPhone crossed 6 million. These were not just instances of people giving their email IDs and subscribing to an alert, the 6 million people who pre-booked the JioPhone paid as much as Rs 500 in advance as pre-booking fees. So the 6 million figure can be counted as a very solid indicator of interest. The grand point over here is that the demand for JioPhone exists and going by what we know so far, it does seem to indicate that the JioPhone is showing no indications of being a flop.
RIL has no problem with Android but…
A lot of people have wondered why RIL does not develop an Android device instead of the JioPhone. The reasoning is that a touchscreen device that’s capable of running complex apps and displaying media over a much larger surface should boost data consumption and help Jio. The reasoning is extremely accurate. There is no doubt that a touchscreen smartphone can be more effective at driving data consumption than a device like the JioPhone.
It is not a matter of whether RIL can afford to subsidize an Android smartphone. RIL has the largest amount of debt amongst all private companies in India and can raise more, considering the excellent credit scores it has. It has already invested USD 30 billion in Jio, and if a few more millions (or even billions) can help Jio gain traction, then RIL logically should not hesitate in pumping in the funds.
The issue is whether people would be able to afford to pay for an Android smartphone. In order to make the already barebones JioPhone economically viable, RIL has had to bring in several terms and conditions such as a minimum recharge of Rs 1500 every year and deductions from the security deposit in the event that the phone is lost or returned before the contract ends. Developing an Android-based smartphone with a touchscreen and a (more) complex processor is only going to increase the price of producing the phone which would mean that RIL would have to increase the security deposit and the terms and conditions associated with it.
A slightly expensive Android smartphone would not work. Airtel and Vodafone have already partnered with Karbonn and other smartphone companies to launch Android smartphones where you receive cash backs after using the phone for a particular period of time, and the response has been rather dull – not even a fraction of the rate people lapped up JioPhone.
The whole point of the JioPhone is to deliver an affordable smartphone-like experience to people who cannot otherwise afford one. Raising the price point of the JioPhone just to add a touchscreen or a more complex processor would destroy the whole point. As I pointed out in a previous article, the cost of a device which can or cannot be subsidized by a telecom operator is dependent on the ARPU that the telecom operator commands and India’s ARPU is still relatively low.
…a lot of effort has gone into JioPhone
A number of people are in my opinion, significantly underestimating the amount of work that Jio has put behind the JioPhone. The carrier has developed a custom digital assistant just for enabling a voice assistant on the device. Jio has gone a step further and apparently convinced SoC designer Qualcomm to create an entire family of SoCs that will be specifically used in VoLTE feature phones alone.
Qualcomm is a silicon giant that dominates the SoC segment of Android smartphones. Just in the last quarter, Qualcomm shipped more than 200 million SoCs. In order to convince a company of that size to create an entire family of low margin SoCs for VoLTE feature phones, Jio would have had to promise a volume of at least tens of millions.
Finally, in order to facilitate using the JioPhone as a set-top box or cable TV, Jio had to launch the JioTV app which has tied up with almost every broadcast house and independent channel operating in India. Launching an app that can act as a replacement for traditional TV in India would mean spending countless hours and money striking content deals.
Judging by all this, the JioPhone does not seem to be a fly by night device. The company has quite clearly spent a lot of money and time developing it, and I do not think that it would have done so only to abandon it within a few months of its launch.
Not a smartphone, not targeted at smartphone users
In my brief time with the JioPhone, I quite clearly feel that the device is definitely worth the Rs 1500 spent on it. I have just one issue with it: it is slow, in fact incredibly slow for someone like me who is accustomed to fast response times. But the point to note is that the JioPhone is not aimed at people like me who have been using smartphones for more than five years now. What is fast or what is slow is often a relative experience. For someone like me, who uses a Qualcomm Snapdragon 820 powered smartphone and Apple A10X powered iPad Pro, the JioPhone would quite obviously feel slow. However, for someone who has never used a smartphone all their life, the very fact that JioPhone can accomplish tasks like live TV is more than enough. Response time is the least of their concerns.
The same logic can be extended to apps. Many feel that an Android phone would give people access to the Play Store and the millions of apps. However, the average user only uses a very small number of apps (Facebook, WhatsApp Messenger, etc.) on their phones. And in a country where feature phones still outnumber smartphones, most people do not even know the concept of apps or an app store.
Promising, but delay is not an option
There can be no doubt that an Android smartphone definitely does the job of driving data consumption better than the JioPhone, but going by what we know, an Android smartphone is simply not economically viable, and Jio has put in a lot of effort in the JioPhone. The only thing that is stopping Jio from making the JioPhone a success are production bottlenecks. It has been more than a month since Jio held the first pre-order session of the JioPhone and the pre-order session is yet to start again. If Jio delays further, then the JioPhone might be undermined by the only factor that could harm its prospects.