India’s communications boss pulls Google to challenge Xiaomi, OV but this is not the biggest threat.

China’s smartphone makers have faced new challenges as they have dominated the Indian market for years. Mukesh Ambani, India’s richest man, is to work with Google to develop low-cost smartphones that will disrupt the local mobile market. On July 15th, at the 43rd annual general meeting of reliance Industrial Group, the richest man’s chairman, Ambani announced to the public that he would receive a $4.5bn investment from Google at the price of a 7.73 per cent stake, which will be injected into Jios Platform, reliance Industries’ digital business.

India's communications boss pulls Google to challenge Xiaomi, OV but this is not the biggest threat.

Ambani revealed that Reliance Industries has struck a broad partnership agreement with Google to build a custom version of the Android operating system and Google Play App Store to support Reliance’s low-cost “4G or even 5G” smartphones.

IDC mobile phone analyst Wang Xi told Time Financial that Reliance Industries’ move is expected to have a big impact on India’s smart computer market landscape. “Although the outbreak has caused some obstacles, the Indian mobile phone market is still an incremental market in the long run, with more players being introduced in the incremental market and access to a number of competing channel resources, which are most enjoyed by channels and terminal dealers,” he said.

Statistics show that in India’s smartphone market in the top five brands, Xiaomi, vivo, OPPO, Realme are All Chinese brands, and are mainly in the middle and low end. Only Samsung is the only company without Chinese ancestry.

Time Financial declined to comment when it contacted Xiaomi, Vivo and OPPO for comment.

However, the first mobile phone industry research institute president Sun Yanxuan pointed out to time finance, in the short term, reliance is difficult to pose a challenge to Chinese manufacturers, after all, Xiaomi, OPPO, vivo influence in India has been formed, Indian brands want to pose a threat to Xiaomi, OPPO, vivo, from the mobile phone industry’s historical judgment, at least 5 years or more.

The big-hearted Indian communications overlord.

Founded in 1966, Reliance Industries is India’s largest private group and, over the years, has grown from a textile and polyester company into an integrated company in the fields of energy, materials, retail, entertainment and telecommunications. Ambani took over the group from his father and became Asia’s richest man.

Reliance Jio, a telecommunications company owned by Reliance Industries, has a history of commercial surprises.

Reliance Jio, which was licensed as a local operator in India in 2013 and launched commercial services in the second half of 2016, is the largest mobile network operator in India as of December 31, 2019 and the world’s third-largest network operator, with more than 387.5 million subscribers worldwide, covering more than half of India’s Internet users in all 22 telecom regions.

Such an eye-popping performance is inseparable from Reliance Jio’s crazy marketing strategy. It is the only one in India that has jumped directly into the 4G era when other operators in India are both 2G, 3G and 4G hybrid networks. At the same time, it provides users with six months of free 4G data and voice services, more subversion of the local telecommunications market. A large number of users from 2G, 3G upgrade to 4G, to achieve a real net.

After playing the free 4G network card, Reliance Jio took the lead in hardware, launching an ultra-low-cost 4G phone, the Jio Phone, in the fourth quarter of 2017.

You know, as many as 600 million of India’s 1.3 billion people still use mobile phones. Jio Phone is equipped with quasi-intelligent operating system KaiOS, although not a smart machine, but can also run most of the 4G phone has the function, and the price is extremely low, equivalent to about 157 yuan, in addition, as long as the use of Reliance communications network services, this fee will be returned to users. With a low-cost, discounted monthly rental strategy, the Jio Phone had shipped about 18 million units by the end of 2017.

Since then, in August 2018, jio Phone 2 launched, Reliance Communications is still the main low-cost strategy, including the price of mobile phones only about 280 yuan, more perfect features, configuration is also much stronger than the previous generation.

According to research data from CyberMedia Research in early August of that year, Jio Phone topped India’s mobile phone market with a market share of 27 per cent in the second quarter, with a market share of about 47 per cent, Samsung at 9 per cent and Nokia 8 per cent, and the Indian mobile phone brand’s product line, which includes features, smart sms and fusion phones, a fusion model between the two.

The cleverthing about Reliance Jio is that, in addition to traditional carriers and mobile phone services, it has a near monopoly on the downstream software content side.

It is now India’s largest mobile Internet platform, through the open platform Jio Platform, app store KaiStore, Jio Phone users can use services including instant messaging Jio Chat, video Jio TV, mobile payment Jio Money, online e-commerce JioMart, network, hardware, software upstream and downstream to form a completely closed-loop mobile Internet empire.

Jio’s user base surged to 387m in March, according to the latest telecomuser data released by the Indian Telecommunications Authority (Trai) on July 14.

In October 2019, Reliance Industries announced the creation of a wholly owned subsidiary for its digital businesses, including Jio. The subsidiary was named Jio Platforms in November 2019.

Jio Platforms, which has also been “targeted” by overseas internet giants and a number of investment firms because of its huge business value, has undergone its 14th funding since April 2020, including Facebook, Google, Qualcomm and top private equity, Silver Lake, Vista Equity Partners, General Atlantic, KKR, sovereign wealth fund Mbalada InvestmentS and Abu Dhabi Investment Authority.

What can Google change?

As a developer of Android, Google’s $4.5 billion investment gives more room for imagination.

According to Samir Samat, vice president of Android and Google Play, the phones developed in partnership with Reliance can also connect Jio’s vast video and music library to mobile phones, and the Google team will ensure that health, communications and work-related apps are easy to use and easy for first-time smartphone users to get started.

But low prices remain an important drawfort for Indian consumers. And India, the world’s second-largest country with a population of more than 1.3 billion, has only 450 million active smartphones, and the potential user base remains large.

Smartphones under $200 account for 77% of the Indian market in the first quarter of 2020, while mid-range midrange s200-$600 accounts for 21% and the high-end market for the high-end market is only about 2% in the first quarter of 2020, according to Canalys’ shipments for the first quarter of this year.

According to the latest data, Chinese mobile phone brands accounted for 80 per cent of the market in the second quarter, mainly at the lower and middle ends. Among them, the market share of the first xiaomi is 30.9%, the second-ranked vivo accounted for 21.3%, the fourth and fifth OPPO and realme market share of 12.9%, 10%. In addition, Samsung was third, at 16.8 per cent, while the rest was classified as “other”, at 8.1 per cent. As a result of the outbreak, each brand of mobile phones have a different degree of decline.

Among Xiaomi phones, cheap machines such as the Red Rice Note3, Red Rice Note 4 and Red Rice 4A are the most popular. The price of all three phones is only a few hundred yuan.

According to Rushabh Doshi, an analyst at Canalys, Reliance will historically focus on the low-end smartphone market and preempt other brands at a lower price.

Wang Xi told Time Finance that Reliance Industries has a huge advantage on the basis of preferential network packages and low-cost strategies, which drive users to upgrade smart machines by function machines. “Many of the parts of the Indian Chinese brand have also been made in India, and they are indian workers. In the short term the core is brand competition. “

Sun Yanxuan on the times financial analysis, India’s local brands in search of a suitable opportunity in the rise, in the era of functional machines, India’s original part of the brand from 2G to 3G mobile phone process to do a good job, but because there is no combination of hardware and software core competitiveness, coupled with the strong Chinese mobile phone brand, so can not find a foothold.

In fact, the rise of Jio phone and India’s local mobile phone brands must rely on the improvement of India’s entire smartphone industry chain, which is taking shape with Chinese mobile phone brands.

In 2016, the Indian government raised the import tariff on imports of mobile phone chargers, adapters, batteries, wired headphones and speakers to 29.441 percent, the consumption tax rate to 2 percent (opting for no deduction) or 12.5 percent (opting for deductions); Its supporting upstream and downstream suppliers have also landed in India.

Today, Reliance Industries, backed by Google, still has plenty of opportunities to co-operate with india’s homegrown brands.

However, Sun Yanxuan believes that according to the observation of China’s mobile phone brands, Reliance Industries in the short term will not pose a danger to Xiaomi, OPPO, vivo and other Chinese mobile phone brands. He cites the example of an example in the early years when Nokia and Motorola had an absolute share of China, when Chinese-made mobile phone brands rose rapidly in 2004, but were hit to the bottom by quality problems and then re-emerged in 2006, and now it took nearly 15 years to fully capture more than 95 per cent of China’s market.

By the same token, he argues, India’s mobile phone market will return to China’s path. According to the time node of China’s mobile phone rise, India’s local mobile phone brands, at least five years to compete with Chinese brands.

In addition to market factors, limited to the current relationship between China and India, there was a domestic boycott of Chinese products in mid-June. However, now that the wave of resistance has receded, China’s mobile phones are returning to new releases, according to The According to statistics, at the end of July, Chinese manufacturers will release at least five new mobile phones in the Indian market.

Li Waibin, a mobile phone analyst at IHS, believes that as long as India opens up competition in the market, it will not have much impact on Chinese mobile phones. “The biggest fear is political restrictions.” He told TIME Finance.