Jio facing challenges to manage component supply shortage and price
By MYBRANDBOOK
Reliance Jio will have to put efforts into managing the supply of components of its already delayed JioPhone Next smartphone, analysts said, adding components shortage and rising cost will remain a challenge for the company from a subsidy perspective. They however added that the delay will give Jio some time to rectify the glitches identified during different levels of testing.
“If we analyse the impact of component shortage by price tier, the entry level price tier is the most impacted. The price of certain components have increased by almost 20% but it's not just about the price the lead time to procure these components have also increased significantly like from 8 weeks earlier to almost 16 to 20 weeks in for some of the components,” said, Tarun Pathak, associate director at Counterpoint Research.
Reliance Jio has officially delayed the launch of its affordable smartphone, JioPhone Next, which was developed in partnership with Google, owing to the ongoing semiconductor shortage globally. The phone will now be available "more widely" around the Diwali festive season instead of September 10.
"This additional time will also help mitigate the current industry-wide, global semiconductor shortages," Jio said in a statement.
Both Jio and Google have begun testing the JioPhone Next with a limited set of users for further refinement, as per the official statement.
IDC’s research director Navkendar Singh said that Jio’s decision is understandable considering the component shortage and supply chain challenges plaguing the consumer electronics space.
As per IDC estimates, the next few weeks are very crucial for every brand and they are trying to get maximum stocks for India, which is the second largest market globally.
With JioPhone Next being a pivotal cog for Jio’s goals of feature phone to smartphone migration, it makes sense for Jio to delay its launch and augment chip supplies, Ram said.
An industry executive said that the components shortage, especially semiconductors are creating problems for all bigger OEMs that typically secure inventories in advance. Jio, which is not a regular OEM at the global scale, will have to face similar challenges rather at bigger scale if they plan to flood market with large amount of units of JioPhone Next.
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