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The hottest phones for next billion users are not smartphones



Millions of first time internet consumers from Côte d'Ivoire to India and Indonesia connect to the web on a new device that only costs about $ 25. The gadgets look like the cheap ones

Nokia
Corp

phones that were big about two decades ago. But these hybrid phones, powered by cheap mobile data, provide some basic apps and internet access besides calling and sending SMS.

Smartphones, as they are known, are one of the mobile phone industry's fastest growing and least known segments, providing an easy way for some of the world's poorest people to enter the Internet economy.

While global smartphone sales began to slide last year when markets became saturated, smart broadcasting services tripled to about 75 million from 201

7, according to the research company Counterpoint. Approximately 84 million will probably be sent this year.

Even when rich nations are launching 5G technologies, about 3.4 billion people around the world remain suspended from the internet, according to We Are Social, another research company. Most of them already use traditional, non-connected mobile phones, which means they can easily make the transition to similarly shaped high-speed connection devices.

Take the case of Kamlesh Kumar, who earns about $ 80 a month selling mango, avocado and lychees off the sidewalk in New Delhi.

Kamlesh Kumar, a fruit salesman in New Delhi, paid about $ 2 for his smart feature phone. , JioPhone, which he uses to stream music at work and watch movies with his family at home.


Photo:

Newley Purnell / The Wall Street Journal

Two years ago, the 35-year-old decided to replace his cheap mobile phone that lacked web access. He couldn't even afford the cheapest, naked smartphones that cost about $ 100. So he paid about $ 20 for a smart feature phone, called JioPhone, from the Indian mobile operator Reliance Jio Infocomm Ltd.

Now he listens to Bollywood music at work and uses Google's built-in voice assistant to search for Hindi songs. on Youtube. At night, his family trains around the unit to watch movies.

"I couldn't do anything on my old phone," he said. Mr Kumar pays less than $ 2.50 per month for all the mobile data he needs.

Smartphones are not only cheap, but they also have physical keypads that are less scary than touch screens for those who are new to the technology. At the same time, their batteries hold for several days, a bonus in places where electricity is unreliable.

There is a trade-off for the low price. The devices usually have slower and less powerful components, only base cameras and their screens are usually just a few inches large, factors that contribute to their longer battery life. There are also fewer apps available for smart features.

"The demand for reliable and affordable technology continues to increase" around the world, said Caesar Sengupta, vice president of Google's Next Billion Users initiative. "Smart feature phones provide a gateway for next-billion users to more advanced, affordable technology." When the service started in 2016, managers realized that millions of people who could afford their dirty data didn't sign up because they couldn't afford a smartphone.

Then, the company JioPhone, in collaboration with Hong Kong-based KaiOS Technologies Inc., developed the most widely used operating system to operate smart feature phones globally. The software is designed for devices with limited memory and physical keypads.

Reliance Jio has so far sold more than 60 million of its units in India, the only market where they are available.

By recognizing the potential of smart feature phones to connect next billion users, global technology companies including

Facebook
Inc.

and its WhatsApp service,

Alphabet
Inc.

Google and

Twitter
Inc.

has adjusted their apps so they can be used on the devices. Last year, Google invested $ 22 million in KaiOS.

About 370 million smart feature phones will be sold over the next three years, a $ 28 billion opportunity for hardware, software, and service companies, Counterpoint says.

The market for smartphones is dwarfed, of which 1.5 billion units were sold just last year. But the average smartphone prices continue to hover over $ 300 globally, leaving them out of reach for many.

A JioPhone in a store on the outskirts of Ahmedabad, India.


Photo:

amit dave / Reuters

French mobile operator

Orange
SA

Over the past few months, it has launched a cheap smart phone with packages of cheap mobile data plans in Côte d'Ivoire, Mali, Burkina Faso and Cameroon, and plans to bring it to other markets in Africa and the Middle East.

A limited number of smart feature phones are available in Indonesia and the Indonesian manufacturer WizPhone will within a few weeks start offering a smart feature phone that can be purchased for about $ 7.00. KaiOS also works with Brazilian smartphone manufacturers to roll out models there.

While populated development markets offer the most potential for unit growth, since that is where most of the world's next billion users are located, some companies add similar gadgets to niche groups in richer countries.

Finland's HMD Global Oy, which sells Nokia phones, offers upgraded versions of its popular candy-shaped phones, but with additional web access. With price tags approaching $ 100, their target audience is enthusiasts for the original devices.

Swedish firm

Doro

Last year, AB launched two KaiOS-powered mobile phones designed for the elderly in the US and Europe. The flip-phones with large buttons cost between $ 50 and $ 150.

"A smartphone can be complex and some people get scared," said Sebastien Codeville, KaiOS CEO.

Write to Newley Purnell at newley.purnell@wsj.com

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