Millions of first-time internet consumers are getting online with ~$25 “smart feature phones”, popularized by Indian telecom Reliance Jio and powered by KaiOS
First-time internet consumers are connecting to the web on a new breed of device costing about $25 Tweets: @ericbellmanwsj Tweets: Eric Bellman / @ericbellmanwsj : It's tech with training wheels. @newley uncovers the phone fad Apple, Samsung and Huawei missed. https://www.wsj.com/...
Context & Ripple Effects
This story sits at the start of an arc the corpus traces forward: Reliance Jio turned the ~$25 KaiOS smart feature phone into the on-ramp for first-time Indian internet users, and within weeks of this report MTN and Orange were attempting the same play with ~$20 KaiOS handsets across Africa (MTN and Orange's ~$20 KaiOS push). The device category is the concrete answer to the question tech firms had been asking since at least 2017 about how the next billion users — skewed toward voice, video, and images over text — would actually come online (next-billion product rethink).
The bet on low-cost hardware as a customer funnel deepened after this article: Jio Platforms later cut the price to ~$12 while bundling mobile payments and its own video and music streaming with a $1.5/month data plan (Jio's $12 4G phone with bundled services), and IDC's data shows why the segment persists — roughly 350M Indians still use feature phones, half on models under $18, even as smartphone ASPs climb toward $255 (IDC's feature-phone base in India).
First-order effects
- Millions of first-time Indian consumers gain internet access on ~$25 KaiOS devices, a segment the WSJ notes Apple, Samsung, and Huawei missed with their smartphone lineups.
- Reliance Jio converts cheap hardware into subscriber acquisition, locking new users into its network from their very first device.
Second-order effects
- MTN and Orange import the model to Africa at ~$20 per handset, making KaiOS the default operating system for entry-level connectivity across two continents.
- Jio escalates the price war downward to a ~$12 4G phone bundled with payments and streaming, forcing rivals to compete on service bundles rather than device margins.
Third-order effects
- If the pattern holds, entry-level internet access consolidates around carrier-distributed, service-bundled devices — shifting power from handset makers like Samsung and Huawei to operators who own the customer relationship.
- The widening gap between a $255 smartphone ASP and sub-$18 feature phones gives low-cost smart devices a durable structural role rather than a transitional one, validating the voice- and video-first product designs tech firms sketched for the next billion users.
The trend: First-time internet adoption in emerging markets is consolidating around carrier-subsidized sub-$25 smart devices with bundled services, leaving premium handset makers outside the fastest-growing user base.