Why feature phones still sell in the smartphone age

Yogendra Singh, a senior official in the Bihar government, uses an Android smartphone when he has to browse the web, click a photo or watch YouTube videos. However, he still uses his Nokia 105 feature phone for personal and work calls, simply because he finds it handy and its long battery backup is especially helpful when he is travelling to remote areas for work.

Users like Singh are the reason why the feature phone market is still thriving in India. More than a billion feature phones are expected to be sold worldwide over the next three years, generating around $16 billion cumulatively in hardware revenue, according to a March report by Counterpoint Research.

The fact that many users are still not ready to make the switch from feature phones to smartphones is also causing a slowdown in the smartphone market. In fact, an August report by Gartner noted that smartphone sales in India declined by 2.3% as compared to last year.

So what is it that makes feature phones so popular apart from great battery backup and compact sizes?

Tarun Pathak, research director at Counterpoint Research, points out that there are still close to 400 million feature phone users in India and the transition to smartphones will happen over a period of time. According to him, feature phones are still relevant to certain user segments, especially those at the bottom of the pyramid, rural users and the ones who don't know how to use smartphones. Also many users are not comfortable with the touch phones while others are driven by factors like age, the need for a secondary device and limited user requirements like calling have kept the market buzzing.

"Education, age and income levels play a key role in contributing towards mobile device ownership patterns, with the digitally connected youth having a higher mobility, and hence the tendency to possess a smartphone," says Prabhu Ram, head-industry intelligence group, CMR.

Factors like digital detoxing, too, has swayed many towards features phones and allowed them to cut down the time spent on social media, and avoid isolating themselves from their family, friends and work.

Similarly, parents who don't want to expose their children to smartphones at a young age are opting for feature phones. Feature phones are less distracting when compared to smartphones that can run games like PUBG or stream videos from YouTube.

With the advent of smart feature phones like Jio Phone 2 and Nokia 8110 which offer 4G speeds and support WhatsApp, users can do more even on feature phones. This has made them the go-to option between a feature phone and a decent Android smartphone. Also, the fact that these smart feature phones cost a lot less than an entry-level smartphone adds to their appeal. Ram notes that "the rise of smart feature phones can be traced to KaiOS, the popular operating system that has powered the adoption of low-cost feature phones in the country."

Platforms with KaiOS have been built for basic users and come with simple and easy to understand interface with hardly any bloatware unlike Android OS, which is largely the same even on entry-level smartphones and can be quite confusing to first-time users.

Many of the elements of smartphones are wasted on users with limited requirements. "Not all mobile users find a use case beyond a call. It can be due to (lack of) exposure to digital services, affordability and use case. In many areas, power charging is also an issue so people use feature phones that serve them for longer periods," says Faisal Kawoosa, founder and chief analyst at TechArc.

That said, smartphones have improved significantly and one can do so much more on them, but a large demographic of users in India are not ready for them. Perhaps smartphone vendors need to be a bit more innovative and come up with more user friendly interfaces (UIs), say experts. While regional language UIs for Android like the Indus OS have made the transition to smartphones easier for many, factors like confusing UIs, limited access to electricity and affordability are some barriers that are yet to be overcome.

While Jio appears to be a leader in the smart feature phone segment, it's only a matter of time till other phone makers tap this lucrative segment—at least till entry-level smartphone prices eventually fall to a level that users may not see a need to buy basic feature phones, similar to the manner in which old bulky TVs are giving way to cheaper smart TVs.