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
By launching its 205 Mobile Platform, targeted at feature phones, Qualcomm is exerting further pressure on MediaTek: https://t.co/N4vCU5G0Ql
Follow CCS Insight
Shaun Collins
@pbolt Indeed, a better question might be, where is the value in #5G?
Follow Shaun
Ben Wood
MMT SwissConnect smart strap at #Baselworld2017. MMT has a great technology platform and some great partners includ… https://t.co/icEB28YK8r
Follow Ben
Martin Garner
@Verizon + @AT&T pull @YouTube ads: https://t.co/axiKOgy30T. Philosophical challenge to free speech @Google, or AI ad placement to fix it?
Follow Martin
Geoff Blaber
.@instagram really needs to improve its ad targeting. Bud Light in my feed is nothing short of an insult https://t.co/bXFNsA2BTX
Follow Geoff
Nicholas McQuire
We're going to see more of these moves as the arms race in #AI evolves> Intel creates AI group, aims for more focus https://t.co/Mg6Aqwt3it
Follow Nicholas
Paolo Pescatore
Annoyed. Finally sat down to watch #F1 #AusGP #qualifying in #UltraHD and it failed to record #SkyF1 #4K https://t.co/00f3gawMqs
Follow Paolo
Marina Koytcheva
Proud to be part of a female team, growing in numbers and influence, for the best future of @CCSInsight . Way to go! https://t.co/Ygh1saTgl5
Follow Marina
Kester Mann
As Italy’s regulator probes Wind Tre over zero-rating, two recent CCS Insight Hotlines make useful background readi… https://t.co/tR4enMtc3h
Follow Kester
George Jijiashvili
@KDKlak @benwood @FrederiqueConst @Alpinawatches MMT was part of FC 6 mths ago. MMT was span out. FC is its partner: https://t.co/HW2QBgowqe
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
A Chipset to Bring 4G to Basics Qualcomm's 205 Mobile Platform Targets Emerging Markets The... Read more
Blog Post
Colt Seeks a Return to Its Roots Fibre Provider Unveils Targeted Strategy to Drive New Growth... Read more
Blog Post
Watch Out for Smart Timepieces As Baselworld Begins Many Watchmakers Can No Longer Ignore S... Read more
More blog

Latest Company News

Blog Post
Forecast Reveals Steady Growth in Smartwatch Market Market to double over next four years, reaching 86 million u... Read more
More news