Disruptive Technologies: Mobiles Vs The Rest

Now, I just wrote about how mobiles could kill the watch brands. With Samsung Galaxy Gear, the battle for the wrist is official. If Apple gets in, it will be more interesting. If this was not enough, Adidas has launched a smart watch while Nike already has one.

Now the other day, I was watching TV and saw Priyanka Chopra, the former Miss World, movie star and a favorite for brands in India, promoting two different brands with conflicting interests. In one ad, she is promoting Nikon. In the other, she speaks of Nokia as a listening brand and how the camera in Lumia allows one to take pictures in the low light.

Strange isn't it? Or at least that is what I thought. I posted my opinion about this conflict on my Facebook status. Interestingly, few friends felt that Priyanka was not professional. But that was not the point. She is quite fine in pocketing the money offered by the brands. It should have been the brands' responsibility to ensure that there are no conflict of interest.

Conflict of interest?

On the Facebook status, some felt that there was no conflict of interest. They said one was a mobile phone that has a good camera and the other was a camera brand. Why am I seeing a conflict? Because I saw a sign of disruption. How? First Canon, then Olympus and Fuji exited the low-end camera business.

So, Nokia Lumia 1020 will come with a 41 mega pixel camera. How long before the mobile industry brings cameras that are more sophisticated and capable? Now that is disruption for you. Like classic example of computers replacing typewriters. Emails and electronic transfers have hit the humble neighborhood post office. Telegraph is already history.

As I had said, if Gear and similar devices make watches irrelevant, then there is every possibility that Cameras will also be eaten by mobiles. Going by the looks of it, in future, any device that doesn't multitask is likely to face a death. So, TV can no more be TV, it has to be smart. Gaming Console is not just gaming console, they have to help us watch movies, organize our pictures and listen to music. Watch is not a time observing device, it has to help us read messages, take calls, shoot pictures. Or as Nike and Adidas want it, be our health monitoring device.

While it seems easier for technology companies to diversify, would it be possible for traditional one-category brands to diversify into the technology sphere and stay relevant. Say, would Swatch and Titan start making watches that can be a smartphone? They currently rule the wrists but will it be easier to transform themselves into a technology brands? Will Canon start making phones with much better camera than Samsung or Nokia?

Let me take the risk of predicting the future, here. I think it will be the technology brands that will win the battle. Why? It is the world of Digital Natives who are exposed to technology brands from very early on. Once they grow and find their beloved brands offer more, they are more likely to continue patronizing them. On the other hand, Watch or Cameras come later. Think about it. Children start taking pictures using mobiles and pads much before they are handed over a camera.

The era of technology brands is ushering in, I suppose. Time for other brands to watch out and take steps to evolve and protect their territories.

Oh, by the way, did you read about Google's self-driving cars! 

Samsung Gear: Doomsday for Watch Brands?

Now I know how the Samsung Gear works.

Internet and Computing technology have brought many disruptive changes and transformed the way we live. Older technologies for which Digital Immigrants have nostalgic feelings are unknown to Digital Natives. Existing technologies are made obsolete while the new ones itself become irrelevant in a short period. So when Gear was launched, I wondered if we will witness any disruption?

Will Swatch, Rado, Rolex, Seiko, Citizen, Titan et al become obsolete? Or like how mobile phones have pushed Canon to exit the low end camera business, will watch brands be relevant only for a niche segment? Or will  it be the Gear and its likes become niche?

1. Watch is not a time machine: One thing that goes for the watch brand is that the device is not a functional piece that adorns our wrists. It is a symbol of status. Will mobile brands be able to crack that grip?

2. We have but one wrist: I know we have two wrists but watch goes to only one wrist. If the Gear and Watch have to co-exist, will we start wearing a device in each of our wrists? Will watch lose the race to Gear or will it maintain the hold on its citadel?

3. Gear is no replacement for a phone: If you have seen the video, you must have figured that the Gear doesn't do away with the actual phone. You still need the Note. If I can say, Gear is an extension of phone. Of course, Gear can exist on its own but it will be limited. So you will need to have two devices. I am already thinking of cost.

4. What does Gear offer?: Does Gear have anything substantial to offer? Does it solve any problem for us? Or does it make life easier for us? I believe that the Gear is largely for the Gatekeepers. Will it cross over to the main market, I am not sure.

But if the Gear does win the battle for our wrists, God save the Watch brands!

Imagine after 20 years, when the then Digital Natives look at a piece of today's watch in a museum, they will chuckle and wonder how the Digital Immigrants (that is today's Digital Natives) ever lived without a Gear! Will this happen? Only time will tell. 

Micromax, the true Indian branding success

I usually don’t read Annual Reports that are mailed systematically by the Company Secretaries of the organizations whose shares I have bought. More so if it is AGM address.

But for a change when the AGM address of ITC Chairman YC Deveshwar landed into my inbox recently, I felt like reading it. Maybe because the ITC shares have given me good returns and also the fact that ITC is a great case study of how the group has reinvented itself from being a predominantly Tobacco major into a well-diversified conglomerate. It is also probably the best example for a professionally managed business amidst the predominantly family owned businesses in India.

Mr. Deveshwar's address is very interesting and informative. I specifically like the part on THE INDIAN GLOBAL MARKET: DOMINANCE OF FOREIGN BRANDS. He quotes The ET Intelligence Group report - "...royalty payments by Indian arms of top MNCs have trebled over the past 5 years. The report points out that in FY12, 306 listed companies paid royalty and technical fees aggregating almost Rs 35,000 crores.” Further, a similar analysis by Business Standard of 75 BSE500 companies reveals that these firms paid out royalty equivalent to 32% of their net profits in FY12. This sudden surge he notes is after the removal of ceiling on royalty payments in 2009.

He also quotes media reports that this spurt in payments did not reflect any noteworthy value-addition from technology transfer by the foreign entities. These media articles also expressed concern at the adverse impact of this huge outflow on minority shareholders and on the exchequer.

Look around, one can easily find this dominance in our lives. Almost all the products that Indians consume are foreign brands. But then as Mr. Deveshwar says there are not many Indian success stories. He has listed few in that address. 

What probably he missed is Micromax! The great Indian mobile brand. A brand that has managed to make a mark for itself in a space that is dominated by the Korean Chaebol. 

And I must say in its fight Micromax had to face not only the competition but also the Indian mindset! 

Indian mindset: I am not sure what it is because of but Indians probably don't trust Indian brands. Maybe Indian brands actually do not deliver or as it is said we have a colonial mindset. For us, anything foreign is superior. Couple of years back when Apple was yet to revolutionize the smartphone market, it was the world of feature phones. When I bought one of those feature phones, a colleague exclaimed - Micromax! Yes, it was that degrading tone. Things have changed since then and Micromax seems to be fast catching up with Samsung. But has our mindset changed, I can’t be too sure.

Yes, it's a Me Too: Yes, but in many ways Samsung, LG or any brand is also a Me Too. The advantage of Android ecosystem is so, it provides opportunities for many. Everyone assembles!  

Branding, the game changer: In addition to lacking the drive to innovate, the Indian brands are also not very successful in branding. Thankfully, Micromax has been very savvy. In addition, Micromax products are attractively priced. 

Just like Galaxy, Optimus and Lumia, Micromax has managed to draw its own Canvas. 

The good news is that Micromax is not alone. Recently when I was planning to buy a phone and sought advice from some of my friends. They not only suggested Micromax but also spoke very highly of Karbonn and Xolo. Heartening! Couple years back, many Indians would not have considered them a great choice. 

As a person who has used Micromax product, I urge my fellow brethren to take pride in our local Indian brand. Not just because they are Indian but because these products 

1. Look as great as any other
2. Perform as great if not greater than others 
3. Come at price points which are very attractive 

Unless you want to sponsor the royalty payments that Mr. Deveshwar's address talks about. 

But why only mobile phones, I think there are great Indian brands in almost all the categories. Take Dabur Red for example. Why not Bovonto or Kalimark! And why not Poomer! 

Go Indian! 

Nokia Android Phones! Why Not?

I am not sure who wants whom more desperately. But now I feel Microsoft wanted Nokia than the other way. And I am not sure why Nokia decided to marry one partner rather than bed with many at the same time?

As I wrote in my previous blog about the closed architecture and open architecture, I am not sure what Microsoft wants to achieve going forward. Did it want to go the close architecture way like Apple? Or did it want its own handset like Blackberry? Or it was just about the patents and technology of Nokia that they went after.

Whatever be the reason, I cannot understand why Nokia gave itself away so meekly.

Google's Android is a thriving platform. It has given fillip to many brands and a great chance to gather market shares. India's Micromax is a great case study. I certainly will write about the great Indian brand soon.

Nokia like its competitors in the market, Samsung, LG, HTC..., could have had a stronger play if it had kept an open mind to work with any environment. Its brand equity, reputation for making sturdy phones and great network would have definitely worked in its favor. HTC for example is quite agnostic. It produces models in both Android and Windows platform.

Somehow I think the Finnish owners took a rather easy way out. 

Why Apple Can Never Be No. 1?

Android has 1 bn activations!

1 bn! That's roughly about one-seventh of world's entire population! Almost the entire population of either India or China. Android is the biggest, no doubts. 

Interestingly, history seems to have repeated itself. The architecture of PCs first was closed with each player having their own design, and then IBM standardized it. This environment was and is dominated by Operating System (OS) and Chip combination of Wintel who actually grew the market. The brands productized and marketed.

Mobiles were also segmented with each brand defining its architecture till iOS and Android started scripting the road map. 

In many ways, Android ecosystem is similar to IBM PC whereas Apple has retained its philosophy of being closed. The benefit of an open architecture is that the market is grown by many of its constituents. Whereas Apple is solely responsible for growth of its devices. Imagine a cart driven by many horses versus the one with just one horse. Which one do you think will run faster? 

I wonder if the Late Steve Jobs underestimated the power of the multi-horse chariot steered by Google. Even if he had seen, which I assume he did, I am sure nothing could have changed the way Apple approached the market. Being the sole owner of its ecosystem is at the core of its strategy.  

But I think Apple should do two things, differently. 

1. Products at multiple price point: The problem with Apple is that we see only one product at a time. iPhone 3 has to be killed before iPhone 4 is launched. And iPhone 5 has to be over iPhone 4, itself. So at any point of time, a consumer has only one option from Apple, limiting the market size. Apple could do better by planning products at different price points. Why can’t 3 co-exist with 4, 4S and 5?
2. Look East: America without a doubt will remain a strong market for Apple. But then there is a mighty chunk of willing fans in this part of the world. Though little late, Apple has finally started to focus on East, especially the big emerging markets. If you noticed, India got a special mention during the last results for being a high growth market. I personally know many acquaintances who jumped at the opportunity to own iPhone 4 and 4S.

Apple already has a great brand equity and its technology leadership is unquestioned. But it always loses out due to its close architecture. What Apple needs in my opinion is smart product planning. Products at different price points. 

It may still not be enough to beat Android base, but it would certainly shore up its numbers.  

Death of SMS Messaging

One, two, three, four, five, six...

No, wait! This is not blog for kindergarten kids. I was just counting the number of messaging apps on my phone. 

1. The native messaging app that comes along in the phone 
2. WhatsApp 
3. Google Hangout (earlier Gtalk) 
4. Facebook Messenger 
5. Skpe 
6. WeChat (till sometime back) 

Previously, I also had Viber. Like WeChat I removed it. How many do you have? 

Couple of days back, BSNL, India's telecom behemoth, announced the winding up of probably the original SMS in India.   

The news made me wonder if SMS as a native app will also meet the same fate. The short life of Short Messaging Service? 

Do I need six apps for messaging? What differentiation does SMS anyway bring to the table? 

Cost did you say? Probably, there was a time when the number of free SMS used to be a differentiating factor while choosing a plan. For years now, I haven't kept track of SMS usage. 

Does it work cheaper then say an IP based Messenger such as WhatsApp? I seriously don't know. Actually, I don't care. 

In one of my previous jobs, my colleague and I had a discussion about the low cost PR agencies which spoilt the market for a large, high-fee charging national agencies. I told her that such low cost agencies are good for national agencies because without them the value that a national agency with its reach and good trained manpower is never realized by clients. Similarly, even if SMS is cheaper, I presume, users will prefer messaging tool that provides them greater user experience. 

I always had trouble sending an image though MMS, the superior cousin of SMS. But with WhatsApp, it is a breeze! 

It is also much more cooler to use the messaging apps then a plain vanilla SMS app. Yes, I know SMS Pro type apps spruce up the native app but then why bother? 

I can't think of any reason as to why I would want to use SMS. Internet on mobile is a reality and will certainly become ubiquitous. Other certainty is that every phone will be "smart" in some ways or other supporting such messaging apps.  

What happens to my alerts regarding bank, credit card or any other utilities? Tough one. Isn't there a way that that can be accommodated in CRM for customer contact? See, there's a business opportunity for some! 

Somehow I am not able to convince myself that SMS, in its current form, will last. Would it? 

What is wrong with Nokia?

Nokia is still the world's largest mobile handset maker. That may change predicts a recent article in The Economist. Samsung is likely to take over as the new number one handset maker. Am not sure why Nokia is losing out so badly despite having a reputation for producing sturdy devices.

I don't care much about the lower end of the market, but Nokia's strategy in the higher end of the market is flawed. Simply flawed. Nokia has aligned itself with Windows for the smartphone segment. And I really don't understand the need for Nokia to be married to just one environment when it could have been in bed with Google, too. If I am not wrong, Windows phone has not made any cut, not even the Windows 7. In the technology market, it is more important to be aligned to the leader. Or be independent differentiated like Apple.

What stopped Nokia from following HTC strategy? The latter churns out phones both on Google and Windows platform.

What stops Nokia? If nothing does, what is wrong with Nokia?

Why Blackberry?

I have never understood why people may want to buy a Blackberry. People tell me it is the mail service, the others say messenger.

Does it really matter?

Now I have used a Blackberry in the past and use a handset even now. Blackberry service is more expensive than a normal GPRS service though it can be marginally be faster. Recently my employers provided me an HTC handset. I access my official and personal mails on that phone. Of course, both of them are Gmail service. It may be argued that the Blackberry service is the safest way to access emails using mobile service. But I am not sure if it sustainable advantage now. RIM started expanding its customer base and started targeting the youngsters and to me that segment may not be as worried as the corporate citizens about security. With iPhone and Android, RIM has also lost its the-email-phone status.

BBM is another app that is often cited for its success. But then with an app like Whatsapp, I am not sure if anyone needs a BBM like limited messenger.

Am I missing anything here? What is Blackberry's distinct competitive advantage? Someone please enlighten me.

Why Android Will Win?

Till about a couple of years back no one bothered about a mobile operating system. Mobiles were about talking and messaging. Then came camera, music players, gaming on phone. It was all going fine till the world slowly but surely started using phones not only for voice but also for data (Or should I say more data, messaging is also a form of data). And phones remained no more just phones, but transformed into smart phones. It may, in fact, be wrong to call them phones. They have become the device for communication, work and entertainment. But for now, let's call them smart phones.

Apple tasted blood through iPhone while still making great looking laptops/computers. Nokia was serving the masses. Blackberry was delivering emails to corporate executives. Microsoft was eager to repeat its desktop success through Windows Mobile. There were also iPAQs and Palm, guess they still do exist.  

Interestingly, the last two have been there for ages, but it's  Apple iPhone that brought freshness and zest. Google, while failing with Wave , created the buzz with Android. Of course, since then Blackberry wants boys. Nokia is desperately trying to lure people to Ovi. And, of course, Windows Mobile is fumbling. But the daggers are out! But, at this point, it looks like it's a straight fight between Apple and Google.

It was probably not an accident that Steve Jobs attended the Q3 FY 10 earnings call, as this report says. There are clear signs of war and while the market for such smart phones is still quite small, the players certainly are ascertaining themselves.

So, who could be the winner in the long run?

If I have to make a prediction, I would say Google is in the best position to be the winner or say garner larger market share.

And here is why I think so.

1. History repeats itself: Have you watched Pirates of the Silicon Valley? For those who have tracked the history of computers know the pioneering efforts of IBM in standardizing the architecture of PC. The standardization and ripping a PC led to the creation of opportunity for different players who together grew the market. As Mr. Geoff Moore would agree, Google isn't trying to dominate the entire value chain. It prefers to become the Microsoft of mobile industry by giving a platform and letting device players and app makers to contribute their bit.
2. It's all about App: Having conquered the PC market by ensuring that it was installed in all IBM and IBM clones, Microsoft ensured that it held the dominance over the applications built. And, of course, applications are the reasons we purchase computers, don't we! It's no different in the smartphone market. Every player has an application store. Apple as usual seems to have very high standards for app developers. That can go against it. Human beings have been rather lenient on not-perfect applications, it's the variety of choices that matters.
3. Open or Closed, does it matter: I am quite skeptical like Apple about Open in the mobile world as much as Microsoft is or was in the PC world. Linux still hasn't broken Windows' back. Google's claim for Android being open actually doesn't make sense. As long as users get the apps they want, it shouldn't matter. But then openness could also mean faster go-to-market and choice.  

One of the biggest challenge that companies face when the market reaches the tornado phase is to ensure delivery. To me, Android seems in the best position today. It is developing a larger ecosystem than anyone else.

But then I am assuming a lot of things:

• I am assuming that smart phone market will go through the same cycle as PCs. It may be entirely different. PC was lot about technology for a long time before it became mainstream and brand oriented. Mobile market is moving the other way around. 
• The life of a mobile phone is rather short. In my own experience, 3 years is a good time for a phone. Except for contacts, I don't remember taking anything else to a new phone. Hence, stickiness factor maybe far less for mobile phones. 
• Like I said in my earlier post on Apple, the company has never wanted to be the largest player in any market. It has always been at the forefront of bringing technology that empower users. It has also preferred to stay a chimp rather than a gorilla. Also, nothing to stop Apple from doing a Shuffle with iPhone.
• I have completely discounted the role played by Telecom Services Provider as distributors. Not sure why this mode of distribution still hasn't caught up in India. If things were to go in that direction, a lot might change. 

It certainly would be interesting to see if there would be a real convergence of the mobile instrument with PC based equipments. The iPads/Tabs seem to be a natural, but not sure if that will be so. But if it is, then a larger market share would mean dominance. But again, if we are also moving to cloud,  the platform may not be important.

We certainly have interesting times in the air!

But I am curious, why don't have any excitement in the mobile chips space?