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In Indonesia, a Smartphone for Every Budget

  • Sara Schonhardt

A worker holds his cell phone as he rests next to watermelons at the Kramat Jati central market in Jakarta, March 4, 2011.

A worker holds his cell phone as he rests next to watermelons at the Kramat Jati central market in Jakarta, March 4, 2011.

Although Apple’s popular iPhone continues to break sales records as a global smartphone leader, millions of people across Asia are getting connected to the Internet through lower-cost phones. In Jakarta, even those with modest incomes can now afford a digital lifestyle.

Rio Safiyanto sits on a busy pedestrian overpass in central Jakarta listening to music from his Nokia mobile phone. The 23-year-old sells facemasks for around 30 cents a piece. But he makes enough to afford a phone that gives him access to Facebook, Twitter and gaming applications.

He says every average person has a mobile phone. He says he uses the technology to communicate. Even when he is far away he can reach his family. He also likes the cellphone's music capabilities.

Safiyanto is one of millions of Indonesians benefiting from low-cost phones and usage plans that allow users to pre-pay for talk time and data. Although some models lack high-speed browsing capabilities, they can access the Internet and social networking sites. Safiyanto's Nokia has a keypad that makes it look almost identical to a Blackberry.

It is known as a feature phone, or smartphone lite, because it is cheaper and less advanced than devices like Apple’s iPhone.

These types of devices now make up the majority of mobile phones sold worldwide and have proven more successful in places like Indonesia, where high-end smartphones can cost upwards of $700.

Although many of these lower-income users are new to smartphones, Eddy Tamboto, the managing director of the Boston Consulting Group’s Jakarta office, says they quickly adapt to the technology.

"For a lot of people, mobile technology is a basic necessity to life," he said. "It’s basically their means to reach the rest of the world. And, a lot of people in the informal sector, the way they get to know about employment opportunities, the way they get to know about entrepreneurial opportunities is actually through the mobile phone. So the phone and the smartphone is not just convenience or indulgence, but actually it’s a big part of a day-to-day necessity."

For instance Nokia offers a service called Life Tools that sends text messages to farmers who pay a minimal subscription fee alerting them about weather patterns, crop prices and provides agricultural news and tips. It also has subscriptions for health care and education.

A local entrepreneur, Aldi Haryopratomo, has created a platform that allows small shop owners to sell things like prepaid mobile minutes and life insurance through text message. They can also accept utility bill payments. Ruma, the social enterprise company behind the technology, is currently working on an application that will notify people about job opportunities in their area.

Haryopratomo says that is targeted at blue-collar workers.

"The poorer you are the less likely you are able to get information like jobs, and I think that’s the benefit of technology, is you can make information that was previously expensive to become really, really affordable," said Haryopratomo.

Ruma’s services are geared toward helping feature phone users generate more income, but Haryopratomo says more and more people are moving toward the higher-end smartphones.

At a recent digital technology exhibition in Jakarta, hundreds of people milled around booths selling a range of mobile devices. Young sales staff handed out flyers splashed with promotions while banks offered no-interest financing on credit card purchases.

With competitive financing and credit options, Marina Luthfiani, the manager of an Oke Mobile shop in south Jakarta, says now almost everyone can buy a smartphone.

She says Indonesia is a consumer country and that Indonesians have to have the newest gadgets - even if they are unsure of how they will benefit from the new technology.

Those buying habits are catching the attentions of major consumer companies. McKinsey, a global consulting firm, says Indonesia will have 145 million people with annual incomes above $3,600 by 2030.

Business advisors say Indonesian consumers are explorers who like to try new things, especially when it comes to digital adoption. They are some of the world’s biggest users of Facebook and Twitter. A report released last June by the Paris-based research firm Semiocast ranked Jakarta as the world’s top tweeting city, ahead of Tokyo and London.