Smartphone Country

A little-known American startup is challenging Android and iOS in India, with the help of Jio phones

KaiOS, owned by San Diego-based startup KaiOS Technologies, has gained a 15% market share in India over the last one year.

A two-year-old feature phone operating system is challenging the supremacy of Google’s Android in India.

KaiOS, owned by San Diego-based startup KaiOS Technologies, has gained a 15% market share in India over the last one year, according to May 2018 data by market intelligence firm DeviceAtlas. Its popularity stems from the massive success of Reliance’s Jio phones, which run on KaiOS.

The OS has not only dented Android’s market share but also clawed into the Apple iOS user base.

Data: DeviceAtlas
Data: DeviceAtlas

KaiOS will now also provide the OS for the soon-to-be-launched JioPhone 2, unveiled on July 5.

“The potential of KaiOS is huge when it comes to achieving low-cost, connected feature phones,” said Rushabh Doshi, an analyst at Singapore-based market research firm Canalys. “It’s not a feature phone and it’s not a smartphone. It’s a totally different product by itself.”

Reaffirming its faith in the US firm, the Reliance group’s retail arm bought a 16% stake in KaiOS Technologies for $7 million in March. In fact, even Google invested $22 million in the company last month.

A smart dumb phone

KaiOS provides an almost smartphone-level functionality on a feature phone.

It is the world’s only feature phone OS with apps like Google Maps and Google Assistant. For JioPhone 2, the OS has also integrated some of India’s favourite apps like WhatsApp, Youtube, and Facebook.

“Until now you usually needed a smartphone to make use of these apps, putting them out of reach for many people,” Sebastien Codeville, the 44-year-old CEO of KaiOS Technologies, said in an interview with Quartz. “Bringing these apps to the JioPhone changes this and creates equal digital opportunities for everyone.”

Worldwide, KaiOS works with various telcos like AT&T and Sprint, as well as handset makers like HMD Global, the maker of Nokia phones. However, its association with Reliance is the most lucrative. During the six months ending March 2018, Reliance Jio sold 25 million phones, which is over half of the 40 million KaiOS phones sold worldwide.

“KaiOS’ success in India is 100% owing to the success of Jio and JioPhone. It’s also available in Nokia feature phones but we don’t see those flying off the shelves. Jio has a better go-to-market strategy and better value proposition,” said Doshi of Canalys.

In 2017, KaiOS set up a tech facility in Bengaluru with a team of nearly 30 engineers servicing Jio.

Although the firm did not disclose its specific plans for India, Codeville said the company will use the recent funding from Google to accelerate the global deployment of KaiOS, grow local developer ecosystems, and expand into new product categories like wearables.

“India is one of the fastest growing and largest economies globally and acts as a role model for other emerging markets,” Codeville said. “…if you can create a successful operating system and business model for the next generation of feature phones in India, then you have a blueprint and business case to replicate.”

This article first appeared on Quartz.

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