Sharp fall in shipment of Reliance’s LYF smartphones

The aggressive foray of China-based players into the Indian smartphone market has seen Indian handset-makers losing their ground.

According to a report published by research firm CMR, Reliance Jio-owned LYF brand of smartphones has seen a sharp fall in number of shipments in the first quarter of 2017.

From an all-time high of 2.2 million devices sold in Q2 of 2016-17, the numbers dropped to about 7.4 lakh devices in the fourth quarter.

Analysts say that in addition to Chinese competition, Jio’s partnership with other smartphones brands for VoLTE (Voice over Long-Term Evolution)services may also have hit LYF phones.

“The exclusivity with Jio’s preview offer gave LYF a major push during mid-2016, but once Jio partnered with other smartphone brands, the only thing attracting users to LYF phones was its price point. Players like Xiaomi entered sub-₹6,000 segment with Redmi 4, making it difficult for LYF to generate scale without a unique offering,” Shobhit Srivastava, Analyst at Counterpoint Research Firm, told BusinessLine . Jaipal Singh, Market Analyst at IDC, told BusinessLine that the competition is not the only reason, but also increased pricing of components, making it more difficult for Reliance to match the existing cost structure.

“When now the entire ecosystem has already moved to VoLTE, it makes little sense for Reliance to divert their focus from this category. Two-thirds of Indian users are still on feature phones; Reliance should focus on this segment to add new users and gain higher share in the market,” said Singh.

Srivastava of Counterpoint also asserted that Reliance should ideally divert its focus to feature-phone users. He said: “Going forward, we can expect Jio to enter a new VoLTE feature-phone segment, to target users in rural India in a bid to arrest the declining volumes.”

Reliance Jio did not respond to requests asking for comment.

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