By Sankalp Phartiyal and Rama Venkat
NEW DELHI (Reuters) - Reliance Industries said on Friday its low-cost 4G smartphone, jointly developed by the Indian group's Jio telecoms venture and Alphabet (NASDAQ:GOOGL)'s Google, will launch in stores from this festive season of Diwali for 6,499 rupees ($87).
The smartphone, the product of a $4.5 billion Google investment in Reliance's digital unit last year, will cost 1,999 rupees upfront and users can pay the rest in monthly instalments, Reliance said in a statement.
The device comes with a tweaked Android operating system named Pragati, which means progress, and is aimed at first-time smartphone buyers with features such as quick translations in 10 Indian languages and a voice assistant which can read that text out aloud from the screen.
Google CEO Sundar Pichai said this week that the device partnership with Jio was about investing in local languages, other than English, so that many more Indians can use smartphones.
"So I view it (the phone) as laying the foundation... And, you know, I think over a three- to five-year time frame, it will
end up having a lot of impact," Pichai said in Alphabet's third-quarter earnings call.
The Jio-Google smartphone's pricing will also pose a major challenge to Chinese vendors such as Xiaomi (OTC:XIACF) and BBK Electronics, owner of the Realme, Oppo and Vivo brands, which currently dominate an over $2 billion market for sub-$100 smartphones in India, the world's second biggest smartphone market.
Jio also aims to use the phone to poach 2G users from rivals Vodafone (NASDAQ:VOD) Idea and Bharti Airtel.
The smartphone's pricing could, however, push it out of the reach of a significant chunk of users of basic feature phones, said Navkendar Singh of tech researcher IDC India, dampening Reliance boss and tycoon billionaire Mukesh Ambani's ambitious plan to make India "2G free".
"This is not affordable... Jio is expecting a feature phone or 2G user to almost quadruple their telco spend per month," Singh told Reuters. "That doesn't mean this won't sell, it will, but this misses the affordability mark by a mile."
($1 = 74.8640 Indian rupees)