Reliance Jio to tie up with Flex to produce mobile phones: Report

With an aim to expand its market share, Mukesh Ambani- owned Reliance Jio is reportedly in talks with US contract manufacturer Flex to produce 100 million mobile phone handsets locally.

According to report in ET Jio is in advanced discussions for a large order and that has caused a stir in the market, even prompting Flex to negotiate some tax benefits with the government in the SEZ where its factory is located in Chennai.

"However, the company wants to be able to sell the produced units in the domestic tariff area (DTAs), without attracting the duties, at rates similar to that of FTAs," ET quoted sources.

In fact report from the research firm Counterpoint said that Reliance Jio captured 47 percent feature phone market in Q2, 2018 driven by the success of its Jiophone.

The report also predicts that Reliance Jio is likely to maintain the growth momentum as it refreshed its Jiophone coupled with aggressive upgrade offer of Rs. 501 and bringing popular apps including WhatsApp to Jiophone 2.

IDC also said that Reliance Jio, the telecom operator and the main driver of the 4G feature phone segment with its JioPhone range of phones, remained the top vendor in the overall feature phone market. However, the 4G feature phone market saw a slight decline of 10 percent QoQ with 19.0 million units. IDC believes that this drop is due to JioPhone inventory buildup from 1Q18.

Reliance Jio, as an attempt for clearing this inventory, recently introduced the "Monsoon Hungama" feature phone exchange offer and brought popular apps like WhatsApp, YouTube on JioPhone. The 2G feature phone segment continued to decline further as local players struggle for survival in this segment and segment is losing relevance due to the aggressive push in the 4G feature phone segment by Reliance Jio.