Battle Of Telephonia II: It Isn’t Just The Operators

Yesterday, we told you about the grand battle which is taking place between the mobile operators, fondly called the Tariff War. On the other hand on a relatively smaller scale (as it appears) another battle is on, and this one is between the phone-makers. After all without handsets, the operators are totally useless.

First of all lets check out some history. As many of you might be aware, Motorola happens to be the first company to develop a working practical mobile phone Motorola DynaTAC in 1973, but it wasn’t until 1983 that DynaTAC 8000X was approved as the world’s first commercial-only cellular device. It started off a revolution of mobile communication in the west with people installing (yes it was quite heavy to be carried around in the pocket) it in their cars. It accounted for two-third’s of Motorola’s gross revenue at that time. But Nokia was one of the first to pioneer th GSM Technology and introduced its first GSM phone Nokia 1101 in 1992. Motorola’s first GSM phone StarTAC came out in 1996, which was then the lightest and the slimmest phone, still Motorola rules the market in wireless telephony, But then came 1998, when Motorola slipped to 2nd behind Nokia.

Nokia was now getting powerful with the style that it was adding to its new handsets, which was lacking in Motorola. Then came RAZR, which became by far the most selling mobile phone on earth, and was recently surpassed by- no prizes for guessing- The iPhone. And now has started the revolution of smart phones with android based phones from Motorola, Apple‘s indegenious iPhones and HTC’s windows based phones taking the market of its feet, not to for get Research in Motion’s Blackberry.

Indian Markets, as always have been different. Here consumers definitely would not buy what their neighbours buy, but would always buy something which is ‘supposedly’ superior to theirs. While Nokia holds 40% market share globally, in India Nokia dominates a whooping 57%, which is a humbling Monopoly. Note even remotely close is the next best Samsung with about 8%, followed by LG at 5.5%. Emerging mobile handset vendors (around 26, would you believe that!) managed a mere 6.5 per market share. This data is as of sales in 12 month period from June 2008. In this period the total sales crossed 100 million pieces by number and Rs. 20,000 crore by market revenue. And this data does not include people who get stuff from other countries, ‘grey’ markets and black markets. You have enough food for thought to consume.

The Emerging players offer things which are quite unique and have their own appeal- dual sims, QWERTY keyboard, mailing solution, Email2SMS, which permits sending, receiving, composing and forwarding of emails via SMS. The m-commerce application with N-GPAY is another feature to allow users to make bank transactions and pay bills. A decent dual SIM phone may cost you anywhere between Rs. 2000-8000. Add and subtract the above mentioned features, the price changes.

“Indian consumers have moved towards multi-sim and flexi-sim phones to avail the cost benefits of operator bundled services. Spice Mobiles, that has an installed base of 6 million handsets, is now positive of 1 million handset sales per month within the next 12 months,” says Kunal Ahuja, CEO of Spice Mobiles.

Its not just these emerging players who are catalysing changes, but also big international names with ‘smartphones’ as their forte, posing a possible threat to the established names. The smartphone revolution in India came after the announcement of the Indian Government to go 3G. RIM’s Blackberry, HTC and of course iPhone are attracting the industry oriented people by allowing fast communication and ease of data storage. As far as the Operating System for handheld devices is concerned, Google’s Android, is surely giving Microsoft a run for their money. Its bloodbath on every front.

Wait, Did we miss Motorola? Nokia after tasting a huge success in India, started to get closer to common Indian man by adding features releavent to them. Indians loved it and Nokia became King. Sony Ericsson, though known for its medium and high end phones is still hot favorites with Indian Youth, just because, they have targetted that specific group. Smartphones have become inseparable part of Indian Executives, and Tech geeks because, of the comfrt and ease they provide. And this is how things work in India. Identify a spot and hit it. Unfortunately Motorola could not market itself to Indian audience so well, as a matter of fact anywhere in the world. Till the time they realised that they lacked style, it was too late, and Nokia had already cashed in their cheque to Monopoly. I had even heard Motorola planning to shut down its mobile operations from a Director of one of its subsidiaries. But the recent launch of Droid, has infused a hope that Moto may return.

Meanwhile, The Government of India and Department of Telecom have plans to promote the indigenous emerging players. The Communication and IT Minister, Mr A. Raja, has constituted a committee to suggest ways to boost local manufacturing. It is expected to Report its findings and suggestions in 3 weeks. This would definitely be a big boost to the economy, and may introduce a new culture of R&D in mobile and hand held systems. Its just for us to wait and watch what future holds for us.