Demonetization May Put Feature Phone Purchases on the Back Burner

Birender Singh

Birender Singh


So, the third quarter ended with a bang, with total handset shipments touching the record high of 78-million mark, and with feature phones contributing about 59% to the overall market.

Seventh pay commission hikes, good monsoon had led to about 24% growth in the feature phone market in the third quarter as against in the previous quarter. Although, there was a slowdown in the uptake of smartphones, but feature phones have been maintaining a consistent performance.

In addition to all, Reliance Industries’ announcement to unveil feature phones embedded with 4G capability, VoLTE technology, bundled with voice and video calling would have further boosted the feature phone segment, but now demonetization could prove a setback for this market.

While in the metros, the online trend and the card payments could prove a saviour, but as villages, where the uptake of feature phones is higher, are dependent on the cash transactions, the pinch could be felt in those areas.

Going by the media report, country’s hinterlands are facing a major cash crunch and this circumstance will linger for quite some time now. Currently, feature phones form a significant chunk of the overall handset market and about 65% of total number of subscribers are feature phone users.

If monies do not reach in time to the rural areas of the country, the repercussions could be felt in the current quarter and the whole handset market may suffer.

Reliance Industries is planning to unveil two feature phones within the range of Rs 1,500 during January-March, till then the money situation should improve or we may see a slowdown sooner or later.