Few companies, if any, around the world have taken on Google and lived to tell the tale. From online searches to advertising, from email to smartphone software, Google is omnipresent and, more importantly, omnipotent. Yet it is looking to spread its tentacles even further, to the Next Billion Users, as Google calls the prospective Indian smartphone user.
Enter Reliance Jio, with its own blueprint to beat Google to these users. That plan kicked off in 2017 when it put its app-laden feature phone in the hands of Indians who could not afford a smartphone. Jio hopes its rock-bottom prices, and free services will rope in more users. And once it has Indians hooked onto the internet, Jio can lure them into its 4G-only world – of Jio TV, Jio Money, Jio Cinema – where it can earn money off its users, potentially all one billion of them.
But Jio and Google have taken different paths towards the Next Billion. While Google has put its faith in the reach and popularity of the open ecosystem of its operating system (OS), Android, its dominant revenue stream, about 80%, is by placing advertisements on both its own properties and other apps. For Google, more users mean more money. Ditto Jio, which has built a moat around its users – the same ones Google is targeting – shielding them, their data and monetisation potential, including through advertising, from the prying eyes of tech behemoths.
Much of Jio’s success in this regard and its path to the Next Billion is down to the OS that powers its phones. And Google is watching.
The beauty of San Diego-based KaiOS Technologies’s eponymous OS is that it lets low-memory feature phones run apps, something Google’s Android failed to do. KaiOS even built a Jio Store, a closed highly-regulated ecosystem in which Jio owns 15 of the 35-40 apps. Jio invested $7 million in KaiOS for a 16% stake in 2018, a year after it launched the phones and two years after Google’s plan to democratise the internet. The phone was a roaring success and so was, by extension, the OS that also helped Jio. In June 2018, Google invested $22 million in KaiOS, which in rivalling the Android OS succeeded where tech companies such as Microsoft, Nokia, and Firefox had failed.
The Jio-KaiOS partnership has had mutual benefits. Of KaiOs’ 60 million users globally, 83% are Jio’s users. Of the 300 million subscribers to Jio, 50 million use a Jio Phone. And more perks are there for the taking. There is a $28-billion opportunity switching 2G users to 4G on feature phones in the next three years, according to a report by Counterpoint, a market research firm. Even more encouragingly for Jio, its users seem as eager to gobble up data as an Android user. On a 2.4-inch screen and with 512 MB of memory, the average Jio Phone user consumes about 7.5 GB of data each month, slightly less than the 9.5 GB consumed by the average smartphone-wielding Jio user, said Tarun Pathak, associate director at Counterpoint.