Google, Reliance Jio Eye 450M Users For Low-Cost Smartphones In India

Google and Reliance Jio are teaming up to offer a $50 Android smartphone to the 450 million people living in India who still use outdated 2G handsets or landline phones, the Financial Times reported on Wednesday (July 21).

The JioPhone Next, which was jointly designed by both companies, will run a customized version of Android with Google and Jio apps. In addition, the voice assistant supports several Indian languages. China currently dominates the smartphone space in India. 

“Jio has been good at two things. One is mega-launches. Secondly, breaking the price [barrier],” Neha Singh, founder of data provider Tracxn in Bangalore, told FT.

Although the price of the new smartphone hasn’t been released, analysts expect it to be $50 or less. Other industry leaders feel that the low price will be difficult due to the global shortage of chips and smartphone components, FT reported.

“I don’t think that the supply chain situation globally will permit a cost radically lower than existing players, to say the least,” said Pankaj Mohindroo, chair of the India Cellular & Electronics Association. 

Jio Founder Mukesh Ambani and Sundar Pichai, CEO of Google’s parent company Alphabet, could decide to launch the JioNext phone in other countries. Google is working to attract the “next billion” internet users worldwide, and Jio is looking into overseas expansion, the report noted.

“Google wants to be the first point of call for these users,” Vivekanand Subbaraman, an analyst at brokerage Ambit Capital in Mumbai, told FT. “These new internet users, they haven’t used a desktop. They don’t know that the internet is an open protocol. For those new internet users, those apps are the internet.”

Counterpoint Research Analyst Neil Shah noted that the monthly price of a smartphone — about double that of a 2G phone — could be a big hurdle for the JioPhone Next to scale. The shortage of parts will also impact how many users trade up.

Google and Jio are anticipating a September rollout of the JioPhone Next. In September 2020, Jio indicated that the new smartphone would cost approximately $54. At that time, Google invested $4.5 billion in Jio.