根据对应的市场nitor service, feature phone shipments grew for the fourth consecutive quarter. This is in contrast with the smartphone market, which is experiencing negative growth rates. Feature phones contributed to 23% of the total handset shipments in Q3 2018 and remains a sizable market.

After the slowdown of shipments from Jio in India, much of this growth came from Middle East & Africa (MEA), which has emerged as the largest feature phone market globally. Shipments in MEA grew at a rate of 32%.

Exhibit 1: Feature Phone market share by Region – Q3 2018

There are several reasons for the popularity of feature phone segment:

Battery Life:在一些新兴国家,如非洲和India, infrastructure facilities like electricity are still not accessible to a sizable population. According to world bank data of 2014, around 600 million people lacked electricity in Africa alone. There is an increasing usage of mobile payments in Africa, but for remote areas with no electricity, population is dependent on charging stations (shops giving facilities to charge phone for a payment). Battery life becomes an increasingly important factor for choice of mobile phone, and feature phones have much better battery life than smartphones. Feature phones are also being used as a secondary device for calling by many users on account of their highbattery life.

Sizable User Base:While there has been a trend to migrate to smartphones, still for the not so tech savvy users using a phone for the first time or the older population requiring ease of use, poor quality of entry level smart phones, low purchasing power of users in the emerging markets and robust built of feature phone are some of the reasons which still makes it a popular choice among users. Also, with 4G feature phones in the market, most popular applications like WhatsApp, Facebook and you tube are available on these basic devices, which is enough for a segment of users, who are not willing to upgrade to the smartphone.

Exhibit 2: Smartphone vs Feature Phone YoY Growth – Q3 2017 to Q3 2018

Return of Nokia HMD and growth of iTel:Thereturn of Nokia HMDhas also fueled the demand for feature phones in the market. 3310 has been a smash hit. Nostalgia combined with good built quality has helped become the second largest feature phone player globally in Q3 2018. iTel also with its localized products have become popular in African market which has helped it become the largest feature phone brand globally.

Exhibit 3: Feature Phone Shipment Market Share (%) Q3 2017 vs Q3 2018

Considering the under-penetrated emerging markets, Feature phones will remain relevant for at least next five years. New low-income users, who would experience mobile for the first time will likely do it through a feature phone first.

Like smartphones, feature phones are also upgrading from 2G to 3G and now 4G phones. Applications and facilities which were only a part of smartphones are trickling down to feature phones as well. It will continue to do so as more operators and OEMs try to monetize from the sizable feature phone base.