Feature phones refuse to die, it's too early to write an obituary

The telecom industry is witnessing some really interesting times. Even as 5G, artificial intelligence (AI) and virtual reality (VR), along with smart devices, are capturing the mindshare of the audience globally, Nokia caused a stir when it recently relaunched the iconic 3310 handset first offered in 2000.

Yes. It was like launching a vintage car in the era of driver-less vehicles. The move brought back memories of the first "mass market mobile phone". But more than nostalgia, the launch of the feature phone indicated a trend that refuses to die.

In fact, if analysts and market reports are to be believed, there is lot left in the feature phone segment.

 

According to a report by Strategy Analytics, global feature phone shipments reached 396 million units in 2016, and account for 21 per cent of all the mobile phones shipped in the year. Closer home, IDC and Cyber Media Research forecast a dip in smart phone sales and an increase in feature phone demand in the year 2016-17.

Similarly, a study by eMarketer suggests that feature phones will continue to account for a significant share in the Indian handset market till 2019.

If you think there is something wrong in the way data has been presented, take another look at the numbers. India is not only the second-largest mobile phone market in the world but is also the second-largest in terms of the smartphone market, internet subscribers and social media subscription.

However, it is also true that our country still has a thriving 2G network along with the more modern 3G and 4G networks. A recent study conducted by the Mobile Marketing Association, a global non-profit trade body, reveals that out of the total population of Indians having a mobile phone, 56 per cent still use a feature phone. In some cases, the same user might be carrying both a smartphone and a feature phone.

Why is that? Indians love to talk and, though we want to be updated on the latest technology, we do not like spending too much on handsets. So, there is a large segment of population (over 70 per cent) that is still keeping away from smartphones and data networks, and are happy with feature phones or basic smartphones.

The lack of an ecosystem of quality local applications in regional languages is adding to users continuing with their feature phones. The general perception is: What can I do on a smartphone, with an English menu, which I cannot do on a feature phone?

Moreover, feature phone users do not all come from the low-income category. The eMarketer study suggests that only 25 per cent of feature phone users were from the lower income group. And the usage is not limited to just voice and SMS. Half of the users consume music and one-third watch videos and play games. The study also reveals that feature phone users prefer to access basic internet (2G) through their handsets, as against a desktop or a laptop.

The liking for feature phones is not limited to tier II towns but is visible in tier I towns and mini metros too. The charm of the feature phone lies in affordability and ease of use. Touch-screens, apps and high resolution cameras are great, but it is the battery life that swings the game in favour of feature phones, making them popular among first-time users and senior citizens.

When smartphone users plug in their mobiles multiple times for the juice and carry a separate battery bank, feature phones can boast of nearly 24-hour of talk-time, over 36 hours of music play-back and multiple days of standby time. They are good as back-up phones, can be picked up in emergency situations such as theft or loss, and are easy to operate by seniors. Most importantly, they are affordable.

In July 2015 we saw the ambitious Digital India mission launched and the same year, in October, India hit the billion mark on its mobile phone subscriber base. Digital, of course, is the way forward -- but we cannot ignore the millions that are still taking time to come up to speed.

Feature phones are not being ignored by developers. The recent money transfer app launched by the government -- BHIM -- can work on feature phones too. Similarly, mobile wallet providers have their versions for feature phones. Technology like USSD (Unstructured Supplementary Service Data) is making financial transactions easier on feature phones.

Feature phones are here to stay. Smartphones may overtake and dominate shipments in the next few years. But there will always be a demand for low-cost communication devices that provide all the essential services. So, hold the obituary. It will be a while before we can really write them off.

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(Sharad Mehrotra is the CEO of Telenor (India) Communications. He can be reached at sharadmehrotra@telenor.in)