The global feature phone market grew 38% annually in Q1 2018, driven by strong shipments of Reliance JioPhone in India and the return of Nokia HMD. India alone contributed to almost 43% of the total feature phone shipments in Q1 2018.
Reliance JioPhone became the best-selling feature phone model in Q1 2018, Jio was also the best-selling feature phone brand in Q1 2018. It was followed by Nokia HMD, iTel, Samsung and Tecno which formed the list of the top five brands.
Table 1: Global Top Selling Feature Brands – Q1 2018
Source: Counterpoint’s Handset Tracker – Q1 2018
Why are feature phones still around?
There are still around half a billion feature phones sold every year and these continue to serve the needs of the roughly two billion feature phones users globally. This is still a huge market catering to a diverse user base, many of whom still prefer feature phones over smartphones. The reasons for this loyalty to feature phones are as diverse as the user base, but include reasons like:
- Preference for simplicity
- Lighter, robust form-factors
- Longer battery life
- Lower cost
Some feature phone users also suffer from digital, economic or literacy divides and face barriers to adopt relatively expensive smartphones and data plans. In addition, this preference also stems from the fact that low-cost smartphones tend to offer poor performance and poor quality. Feature phone segment still has huge opportunity that remains to be exploited by the mobile industry.
Source: Counterpoint’s Global Handset Tracker – Q1 2018
Exploiting the opportunity with 4G feature phones
The launch of 4G feature phones is helping OEMs drive feature phone to feature phone upgrades while it also drives 4G adoption for telecom operators.
4G feature phones are positioned to enable the bottom-of-the-pyramid users who are using basic voice services on mobile phone and cannot afford a smartphone or expensive data plan. They can now access 4G internet for the first time, with key internet capable apps and services from operator’s expanding ecosystem as well as popular third-party companies.
Companies like KaiOS and Reliance Jio are working to add more value to the 4G feature phones, as a result making it more appealing for bottom of pyramid users who are not comfortable with touch form factor, lack of vernacular content and quality smartphones below $40. Further adoption can be driven by possible introduction of new apps e.g. Facebook, Google Assitant, maps, search and digital payments.
Reliance Jio 4G feature phone quickly made it to the top spot in the global feature phone market, underlining the potential of 4G feature phones. The top five feature phone list is still dominated by the incumbent 2G feature phones. This might change in the coming quarters, as more 4G feature phones become available in the market, with Nokia HMD launching a 4G version of its 3310 model and the newly launched 8810 models. Other feature phone OEMs are also expected to follow the trend by launching such devices.