Jio and Google Pair Up for Smartphone Push

Big investment shows India is a growing part of Google’s strategy

On 15 July, Google announced the launch of its Google for India Digitization Fund, and said that it will invest $10 billion over the next five to seven years in the country. This initiative comes at an interesting time as India attempts to reduce its reliance on Chinese technology companies. Last month, the government banned 59 Chinese apps and services, including TikTok and WeChat, from the country.

As part of its move, Google will invest $4.5 billion — equivalent to a 7.73% stake — in Jio Platforms, the technology arm of Reliance Industries. Google will also work with Jio to jointly develop entry-level and affordable 4G and even 5G smartphones by providing optimizations to its Android operating system and its Play Store.

Google has been working toward enabling more smartphone users in India for several years. The company has Android Go, a special edition of its operating system designed for entry-level smartphones, which has had mixed results despite being used by several smartphone makers. By collaborating with Jio, Google will be able to reach out directly to first-time smartphone users looking to become digital citizens.

For Jio, this is the second attempt to launch its own branded phones, having previously released its low-cost Lyf phones to quickly bring subscribers to its network after the latter launched in 2016. These devices were based on the KaiOS platform — which won a $22 million boost from Google — and offered what became known as a “smart featurephone” experience supporting popular apps such as WhatsApp. But with the growing need to offer ultralow-cost, fully featured Android smartphones, a deep partnership with Google makes sense.

With more than 350 million users of feature phones in India, Jio’s partnership with Google will help accelerate the migration of users from 2G feature phones to affordable smartphones on 4G and above. Jio is certainly a significant channel for devices: it says it has sold more than 100 million feature phones powered by KaiOS to price-sensitive customers in the country. We believe that Jio’s partnership with Google will allow it to take things to the next level, putting more-capable Android smartphones in the hands of the masses.

Jio Platforms’ core business is a telecom network that has shown remarkable growth, building up more than 370 million subscribers since its launch in 2016. Jio can rightly take credit for bringing tens of millions of Indians online for the first time by providing cheap access to data.

This partnership with Google is one of a series of deals Jio has been making during the past few months, an indication of how important the Indian market is and how pivotal Jio has become in the country. Jio Platforms has already secured close to $20 billion in investments from the likes of Facebook and Intel among other Western companies (see Social Experiment). The recent spate of investments means that the Jio is now debt-free, and will help grow the company’s ventures in e-commerce, digital currencies and other online initiatives.

Through their partnership, Google and Jio will exploit each other’s strengths, bring Internet access to more people in India and advance the country’s digital push. In view of the spat between India and China, the deal could be bad news for Chinese device manufacturers that have captured more than 70% market share of the market for low-cost smartphones in India.