The 2K Challenge

Indian Smartphone Makers Asked to Aim Low


India's economy is still very much cash-based, making the government's goal of eliminating the circulation of banknotes of large denominations particularly difficult. Without a fair substitute to paper money, cash will continue to be king in India despite the withdrawal of certain notes in November 2016.

Secure mobile payment services do work in India, including several that only require a feature-phone, but the government is especially encouraging the use of its own service BHIM, or Bharat Interface for Money. It's an app-based approach that connects users' bank account with their phone number supporting immediate money transfers.

The main barrier to BHIM is the number of smartphones in use in India — about 300 million. That's a big number, but with more than 1.2 billion people, India is a huge country. About 25 percent of the population use a smartphone, and mostly the middle and upper classes.

The government of prime minister Narendra Modi recently met with top Indian smartphone makers including Micromax, Intex, Lava and Karbonn, challenging them to develop smartphones that retail for 2,000 rupees (about $30). In order to optimise the mobile payment experience, the phones need to have a fingerprint sensor and the ability to read QR codes. The government's aim is to allow financial transactions from anywhere, and fingerprint scanning will enable payments based on Aadhaar — a government programme that assigns a unique identity number to residents of India — in the future.

The government is asking a lot. Pushing a bill of materials for such a smartphone below $30 is more of an impossibility than a challenge, at least for the time being. It is possible to find Android smartphones in India now for about 2,000 rupees, but these are rudimentary devices. To meet Mr Modi's smartphone feature requests, manufacturers would have to swallow the addition to the bill of materials eliminating already hair-thin margins.

The road to a cash-free society won't be made with losses. The government is exploring ways to help the digital economy grow in rural areas where 70 percent of the population resides. Its ambitions are understandable, but currently unrealistic.

This entry was posted on January 10th, 2017 and is filed under Devices. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted By Raghu Gopal On January 10th, 2017


Comments
(There are no comments yet)
Leave a Comment

Hot News

Team Tweets

CCS Insight
Xiaomi resists the market trends of bigger phone screens and smaller bezels with its new Mi 6 flagship handset: https://t.co/w4oYNPd2yO
Follow CCS Insight
Shaun Collins
RT @kestermann: Orange the latest telco to launch personal assistant. CEO @srichard introduces and demonstrates #Djingo on stage. #ShowHello
Follow Shaun
Ben Wood
RT @nickmcquire: Half of UK workers "relaxed" and positive on #workplace #AI as a means to improve jobs, creativity & flexibility https://t…
Follow Ben
Martin Garner
@amazon launches DIY subscriptions service marketplace - interesting move with high potential for disruption. https://t.co/o6WxjfpYjv
Follow Martin
Geoff Blaber
RT @Mikel_Jollett: TRUMP: The protesters are paid. These marches are small. Well, here's Chicago today: https://t.co/iyfVfmFy8O
Follow Geoff
Marina Koytcheva
@nickmcquire @benwood @facebook @geoffblaber @martin_garner @shauncollins @George_CCS Don't judge too fast, dummy t… https://t.co/eokzYz2EdN
Follow Marina
Nicholas McQuire
Half of UK workers "relaxed" and positive on #workplace #AI as a means to improve jobs, creativity & flexibility https://t.co/E9kduUhFxL
Follow Nicholas
Paolo Pescatore
#NABShow: Time for ShowStoppers. One of my highlights of any show https://t.co/myJSTCSEJ1
Follow Paolo
Kester Mann
Just published – latest @CCSInsight Hotline provides an in-depth assessment of progress, achievements and challenge… https://t.co/oTpd8PLpg9
Follow Kester
George Jijiashvili
RT @benwood: Huge potential for VR beyond games. Smart move by @unity3d to move in this direction. https://t.co/OZSuFtG0M0
Follow George
Katie Taylor
Working on a new study on @SketchBookPro with the @AdonitNews Jot Touch stylus https://t.co/4m2Q9v0eUl
Follow Katie

Recent Blog Posts

Blog Post
Miles of Light Verizon to Buy Miles of Fibre for Fixed-Line and Wireless Se... Read more
Blog Post
Xiaomi Didn't Get the Big Device Memo Reveals Its New Mi 6 Flagship Phone On Wednesday at an even... Read more
Blog Post
Facing Reality Will Users Take to Facebook's New Dual Realities? For Faceb... Read more
More blog

Latest Company News

Blog Post
Sales of 5G Smartphones to Hit 100 Million in 2021 Over 10 billion mobile phones to be shipped in the next five... Read more
More news