Reliance-Google’s new smartphone has got mixed reviews from analysts and brokerages.
The phone pricing is seen unattractive for low-end customers and bundled offers are being viewed as non-disruptive.
While this could slow the pace of adoption, it could set the stage for tariff hikes in the industry, feel analysts.
ICICI Securities: Targeting 100 million users for JioPhone Next
As supply chain pressures ease Reliance Jio will enhance the appeal of JioPhone Next and aim at onboarding 100 million users.
It expects the company to heavily focus on converting JioPhone customers to JioPhone Next.
Jio has been anticipating a tariff hike in the smartphone category, which may come soon. In that case, JioPhone Next price will look affordable and this will enable RJio to attract more users.
Emkay Global : Pricing competitive but not aggressive
Emkay Global believes that bottom of the pyramid/non data subscribers might not have the propensity to pay the upfront cost of Rs 1,999 and high monthly EMIs for JioPhone Next.
It says that the target audience for the phone would be the mid-segment subscribers, that is customers using mobile phones in the range of Rs 5,000-8,000.
Apart from first time users, replacement demand could be a big potential opportunity to gain volumes.
Kotak Securities: Jio subscriber plans less attractive than Airtel’s cashback scheme
Jio’s bundled offer of JioPhone Next seems less attractive than Airtel’s recent cashback scheme on a wide variety of new 4G devices.
It believes that Jio’s plans are unlikely to cause any major disruption and hence, the stage seems set for the operators to raise tariffs in the prepaid segment.
Jefferies: Expect Jio to lower price of smartphone
JioPhone Next pricing does not offer any material incentive for feature phone/JioPhone users to upgrade to the new smartphone thus shrinking the addressable market size by 80 per cent to mere 105 million low-end smartphone users.
It expects Reliance to lower the price of the new phone.
Jio’s weak subscriber performance in the second quarter with potentially weak take-up for JioPhone Next may delay tariff hikes.
CLSA: Expect limited churn of 2G subscribers
CLSA believes that the high upfront cost and high monthly EMIs starting Rs 300 will limit the churn of incumbent 2G subscribers which typically have monthly average revenue per user of under Rs 100.
Bundled pricing indicates Jio has not reduced tariffs and should accelerate data tariff hikes by companies.
It does not see an impact on Bharti Airtel as it recently launched a cashback scheme to enable subscribers upgrade to smartphones.
Credit Suisse: Expect OEM tie-ups by Airtel and Vi for smartphones
Credit Suisse believes uptake for JioPhone Next to be gradual and expects it to compete with other smartphones in that category.
It also expects Airtel and Vodafone Idea to partner with handset makers as well as banks and NBFCs to facilitate feature phone users to upgrade to smartphones.
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