Feature phone shipments drop in Q1, but brands play it cool

Smruti Kamath Mumbai | Updated on May 31, 2019 Published on May 31, 2019

Affordable internet access and the declining price of smart phones are beginning to eat into the Indian feature phone market. While India’s smartphone market grew by 7.1 per cent in the first quarter of calender year 2019, feature phones have seen a sharp decline, according to a report by International Data Corporation (IDC).

Upasana Joshi, Associate Research Manager, IDC India, said: "The 2G feature phone market will continue to decline, and 4G feature phones will either see stable or less aggressive shipments, similar tothe initial opening quarters since Q4 2017.”

The feature phone market — which accounts for half of the total mobile phone shipments — registered shipments of 32.3 million units in Q1 2019, a decline of 42.4 per cent compared with the same quarter last year. The shipping of 4G-enabled feature phones dipped more than 50 per cent year-on-year due to channel inventory from the previous quarters, the IDC report said.

Growth foreseen

There has been no dip since 2017 in the feature phone market. This is primarily driven by high shipments of 4G feature phones, in particular Jio phones. However,this led to a decline in demand for 2G feature phones offered by other brands.

But industry players are not worried. “It would be premature to conclude a decline in the feature phone market just on the basis of data from one quarter. We need to study shipment sizes for at least one more quarter to draw a conclusion. Our internal data analytics suggest that Q2 will be much better in the feature phone category,” said Tejinder Singh, Head, Product (Feature Phones), Lava International.

Feature phones themselves have undergone a change with the launch of 4G. Advancement of the operating system, such as ‘KaiOS’, gives a feature model capabilities similar to a smartphone. Feature phones powered by KaiOS deliver voice over LTE calling and have apps like WhatsApp.

Analysts at Counterpoint Research believe that the emergence of 4G-like capabilities in feature phones will be a key trend moving forward, which will allow the feature phone segment to remain relatively resilient in the medium term.

Brands like Lava have a design team in India for constant innovation. “We have been able to come up with new features in our phones which are highly appreciated by consumers and are the core reason of our growth in this segment,’’ said Singh.

The writer is an intern

with BusinessLine

Published on May 31, 2019
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