Reliance JioPhone actually costs Rs 2,500 to manufacture: Report

Reliance Jio sells a JioPhone unit at 40 percent subsidized rates.

Reliance Jio took a bold step recently with the launch of the JioPhone feature phone. The 4G VoLTE-enabled device comes with a three-year refundable program making it effectively free. However, the initial manufacturing cost of the JioPhone is a little more than what company is selling it for. The company has reportedly subsidized the JioPhone price by up to 40 percent.

According to Reuters, manufacturing a JioPhone costs Rs 2,500 per unit to the company. Which implies that if the company ships around 100 million units of JioPhone, vaguely considering the current subscriber count, it will bear a total expense of over Rs 15 billion. Notably, Reliance Jio is looking at an even larger customer base who have not switched to smartphones yet.

Such benchmarks of subsidy are a testimony to company’s ambitions of reaching out to consumers far and wide. Reliance Jio has been overtly expressive about its plans with the disruptive strategies in its one year run till now. As per reports, Reliance Jio is aiming to have a subscriber base of around 250 to 300 million new customers in next two years. The telco has so far logged 128 million subscribers since its launch last year. a JioPhone unit at 40 percent subsidized rates

The report cites another source saying, “The 3,000-rupee smartphone was not cutting it. Reliance is making a bold attempt with this phone and data will be the key driver for them.” Reliance Jio claims to have received around 6 million orders for JioPhone from the time it opened pre-bookings. The JioPhone delivery started this Sunday, and the company is said to deliver the first lot of JioPhone in 15 days. 

The Rs 1,500 JioPhone has a 2.4-inch screen, 2-megapixel rear camera, a front VGA camera, 512MB RAM, and 4GB of internal storage. The storage is further expandable up to 128GB using a microSD card. The phone packs a 2,000mAh battery within, and comes preloaded with a host of Jio powered services such as MyJio, Jio TV, Jio Movies, and others.