Reliance Industries began talks with suppliers to produce a JioPhone running Android expected to retail for around $54, Bloomberg reported, with the company expecting to sell more than 150 million units in the first two years.

The news website’s sources said the device would be sold alongside low-cost contracts from affiliate Reliance Jio, with the handsets set to be assembled in India.

Reliance Industries already offers two versions of the JioPhone: both are feature phones which include limited functionalities generally associated with low-end smartphones. Its current devices run KaiOS and can only access selected apps through the JioStore.

No details on timelines for the latest device’s availability were disclosed.

The news comes two months after Google struck a deal to buy a stake in Reliance Industries’ digital business Jio Platforms with a view to, among other ventures, bringing an affordable entry-level smartphone to the Indian market.

Should sales of the affordable smartphone reach anywhere near the 150 million to 200 million targeted, it would significantly shake-up the sector in the country.

Figures from Counterpoint Research put the total number of smartphone users in India at just more than 500 million in Q2, with 18 million units shipped during the quarter. However, the number sold in Q2 was significantly down year-on-year due to the Covid-19 (coronavirus) pandemic.

In entering the segment, Reliance Industries will compete directly with market leader Xiaomi, which Counterpoint Research said held a 29 per cent market share in Q2, ahead of Samsung (26 per cent), and Vivo and Realme (10 per cent apiece).