Global Smart Feature Phone Market Reaches Pre-pandemic Level; New launches and Innovation Drive Growth

Driven by the momentum generated by the reopening of markets and new product launches and partnerships by operators in Africa and Latin America, the global smart feature phone shipments grew 26% in Q4 2020 to reach the pre-pandemic level, according to Counterpoint’s Smart Feature Phone Tracker. The market had experienced a dip in Q2 2020 followed by a resurgence in Q3 which laid the foundation for the growth in Q4 2020.

The market was also helped by a renewed focus of India’s Reliance Jio after the dip in Q2 2020. As a result, the Indian market led the shipments with a 63% share of the global market in Q4 2020. Europe and the Middle East and Africa (MEA) also showed encouraging signs with positive quarterly growth of 28% and 398% respectively.

Counterpoint Research Global Smart Feature Phone Shipments Quarterly Growth, 2020

The COVID-19 pandemic severely hit the market in Q2 2020. Lockdowns, closure of stores, and disruptions in the supply chain led to a 35% decline in shipments. Cutting down of non-essential expenses by target consumers also disrupted the market. Only the North American region helped sustain the market, thanks to the government stimulus.

The disruptions in Q2 2020 also meant new launches were no longer possible. With the lifting of restrictions, new launches and partnerships, and expansion into new markets started again, helping the shipments increase by 30% in Q3 2020.

The momentum of Q3 continued into Q4. We also observed innovations in product and GTM for smart feature phones, which ultimately pushed the market in reaching pre-pandemic levels. In Bangladesh, we saw the world’s first smart feature phone with a built-in infrared thermometer. In another example of success from South Asia, the world’s cheapest smart feature phone, Jazz Digit, saw successful trials for financing options. This later encouraged Jazz to add two new SKUs to its smart feature phone portfolio.

Conclusion and Outlook

The smart feature phone fills a very large and important gap in the digital ecosystem. Its target consumers cannot afford a smartphone or do not want to use a smartphone. A smart feature phone solves both these problems by offering basic connectivity features like 3G, 4G and Wi-Fi packaged in an easy-to-use form factor and at a price slightly higher than a feature phone.

The pandemic has made digital communication more important and has accelerated trends such as work-from-home and digital education. In such a scenario, the role of the smart feature phone becomes very important, especially for those who cannot afford a smartphone. For the operators, it helps in moving customers from 2G to 3G/4G and increasing their ARPUs.

The smart feature phone market is now seeing second-generation products. We are also witnessing a flurry of new launches, product innovations, and new go-to-market approaches, all of which can lead to an increase in smart feature phone shipments. New launches in Africa and Latin America, the launch of the world’s first IR thermometer-equipped phone in Bangladesh, and device financing in Pakistan are all pointers to the direction the smart feature phone industry is going.

We expect the smart feature phone market to increase by 10% YoY in 2021, banking on innovations in the industry and a rebound from the pandemic-hit year.