Reliance Retail’s LYF smartphone could become a $1 billion brand in 2016-17 and corner a market share of about 7 per cent, brokerage firm CLSA predicts in a report.
“Achieving about 7 per cent market share of the estimated 137 million smartphone sales in FY17 will mean sales of 10 million units. This could make LYF a $1 billion brand using an ASP (average selling price) of $100,” CLSA said.
The LYF handsets are available in the price range of Rs 4,799-19,499 per unit.
According to CLSA, LYF has launched its own range of smart televisions priced between Rs 65,990-1,99,990 and plans to enter the mobile accessories segment.
Sales growth in LYF smartphones, the firm said, “could drive a 31 per cent year-on-year bump to Reliance Retail’s financial year 2016 revenue of Rs 216 billion”.
Ahead of its commercial launch, Reliance Jio has thrown open its service to the public on a trial basis for free. A person can get its SIM only after getting an invite from an employee of a Reliance Industries group firm.
The other rider is he will have to buy an LYF handset being sold by Reliance Digital to avail of the service.
“Sales will also get a boost from the ongoing invite-based offer for Jio’s 4G services, which is exclusively for buyers of LYF phones,” CLSA said.
Under the scheme, an RIL group firm employee can invite 10 people to get Jio’s 4G SIM cards and LYF handsets.
The connection will come bundled with unlimited 4G mobile Internet and phone calls for 90 days, all for free.
“With users getting three months of free data usage along with a large quota of voice minutes and SMS, the value proposition of LYF phones has been further enhanced. This could boost demand at least temporarily,” CLSA said.