Reliance Retail Ltd, the retail business of Reliance Industries Ltd, has picked up 16% stake in a California-based firm that provides operating system for its internet-enabled low-cost mobile, JioPhone.
As part of the all-cash deal, Reliance Retail has dished out $7 million for the shareholding in the mobile operating system provider KaiOS Technologies, Reliance Industries said in a stock-exchange disclosure. The firm has subscribed to 1,904,781 common shares at $3.675 each.Reliance Industries said the investment can result in synergies with Reliance Retail’s current investments in affordable digital devices and also with the digital services initiatives of the group.Incorporated in 2014, San Diego, California-based KaiOS Technologies is a mobile operating system provider. The operating system, KaiOS, has presence in India, Canada and the US through partnerships with telecom operators Sprint, AT&T, T-Mobile and Reliance Jio, according to the firm’s website.
KaiOS Technologies saw its revenue grow more than three times to $9.25 million for 2017 from $2.5 million for 2016. It has a workforce of over 170 people spread over offices in the US, Brazil, Hong Kong, France, India, China, and Taiwan, according to its LinkedIn profile.
JioPhone and competition
The JioPhone was launched in July 2017, and within half a year of its launch (by December 2017), it managed to become the top feature phone brand by shipments, overthrowing market leader in the segment Samsung. This is in part because of the deal it offers: the phone is effectively free, available for a refundable deposit of Rs 1500. According to Reports JioPhone had a 26% share of the segment of the market that comprises of devices typically under Rs 2,000. Samsung followed with 15% trailed by Micromax at number three.
Airtel has an advantage over Jio, as it gives users a smartphone experience. At the same time, Jio’s prices are tough to compete with. JioPhone recently updated its offering, making the popular Facebook App available via its inbuilt app store. Now with a stake in KTI, Jio’s impact on the phone’s software changes may increase.
VCCircle. (2018). Reliance Retail picks up 16% in JioPhone’s operating system provider. [online] Available at: https://www.vccircle.com/reliance-retail-picks-up-16-in-jiophones-operating-system-provider/ [Accessed 13 Mar. 2018].
Shrivastava, A. (2018). Reliance Retail buys 16% stake in KaiOS tech for $7 million – MediaNama. [online] MediaNama. Available at: https://www.medianama.com/2018/03/223-reliance-retail-kaios/ [Accessed 12 Mar. 2018].