Reliance is all set to launch around 150 million Jio 1500 phones for the Indian market. But is Reliance Jio 4G phone expected to be as groundbreaking as Jio's pricing strategy?
Jio is definitely reinventing the cheap 4G phone category and taking it almost one step forward. And Jio 4G feature phones are priced at free. But is the Jio phone feature an actuality or is it just a publicity stunt?
Jio's Price Strategy
Offering cheap 4G phone data is just a business strategy by Jio. It isn't about selling data or Jio feature phone at a cheaper price. But it's about acquiring a maximum number of customers with minimum efforts and under best possible time. It's both a marketing and pricing strategy to knock off the competitors.
#1. Jio is concentrating more on developing itself as a better provider for the users. It works under a sophisticated and state-of-the-art infrastructure which better utilizes the funds.
#2. Getting rid of the tower system for maintaining just a single G (4G) lowers the cost. Enormous amounts go into erecting cellular towers at various locations.
(Image Courtesy: Chandigarh Institute of Marketing)
#3. Jio is entirely a computer based network that operates with the help of routers and switches. It's a pretty conventional way of working.
#4. Not to forget, Jio's price strategy is affordable because it's the largest fiber optic network. It's pretty challenging, but Jio has support from its parent company to lay down a fiber network of over 2.7 lakh km
It sounds pretty interesting to market a product with the tag of "free." However, Jio feature phone doesn't really come for free, and this is how Mr. Ambani's Jio will manage to offer the cheapest feature phone.
Because of the subscriber moderation, Reliance Jio is now set to target newer market by offering almost 150 million Jio feature phones at the price of about Rs. 500 - Rs. 1000 per device. The phones are subsidized so by the time they reach the end customer; their price will reach about Rs. 1500. For triggering mass adoption of these cheap 4G phones, Jio might also come up with attractive promotional offers. Pre-booking of the same has started and as the booking process draws near, here comes the specifications (Jio phone features):
(Image Courtesy: Freedom 251 info)
Jio 1500 phone will sport a 2.4-inch screen size along with a 240x320 pixels resolution. The phone will be clocked at a 1.2Ghz dual core processor along with 512MB RAM and 4GB storage. This phone would also have a 2MP rear camera.
This cheap 4G phone, called as the Jio 1500 phone, is targeted towards those users who are yet to experience the power of 4G. Each person would be required to deposit a fee of Rs. 1500 which is primarily a security charge that would be refundable after a period of three years when someone returns the phone. This strategy basically makes the Jio feature phone priced at zero.
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I personally feel that this zero effective cost is just a marketing gimmick more than anything else. I don't understand Jio's target audience. People who have access to 4G have access to better smartphones as well. At best, these Jio phones can be secondary phones.