Who sells the largest number of cameras in India?
Your guess is likely to be Sony, Canon or Nikon. Answer is none
of the above. The winner is SAMSUNG whose main line of business in India is not
cameras but cell phones. Reason being cameras bundled with cellphones are
outselling stand alone cameras. Now, what prevents the cellphone from replacing
the camera outright? Nothing at all. One can only hope the Sonys and Canons are
taking note.
Try this. Who is the
biggest in music business in India ? You think it is HMV
Sa-Re-Ga-Ma? Sorry. The answer is Airtel. By selling caller tunes (that play
for 30 seconds) Airtel makes more than what music companies make by selling
music albums (that run for hours). Incidentally Airtel is not in music
business. It is the mobile service provider with the largest subscriber base in
India . That sort of competitor is difficult to detect, even more
difficult to beat (by the time you have identified him he has already gone past
you). But if you imagine that Samsung and Bharti (Airtel's parent) are
breathing easy you can't be farther from truth.
Nokia confessed that they all but missed the smartphone bus.
They admit that Apple's Iphone and Google's Android can make life difficult in
future. But you never thought Google was a mobile company, did you? If these
illustrations mean anything, there is a bigger game unfolding. It is not so
much about mobile or music or camera or emails?
The "Mahabharat" (the great Indian epic battle) is
about "what is tomorrow's personal digital device"? Will it be a
souped up mobile or a palmtop with a telephone? All these are little wars that
add up to that big battle. Hiding behind all these wars is a gem of a question
– "who is my competitor?"
In 2008, who was the toughest competitor to British
Airways in India ? Singapore airlines? Better still, Indian airlines? Maybe,
but there are better answers. There are competitors that can hurt all
these airlines and others not mentioned. The answer is video conferencing and
telepresence services of HP and Cisco. Travel dropped due to recession. Senior
IT executives in India and abroad were compelled by their head quarters to use
video conferencing to shrink travel budget. So much so, that the mad scramble
for American visas from Indian techies was nowhere in sight in 2008. ( India
has a quota of something like 65,000 visas to the U.S. They were going
a-begging. Blame it on recession!). So far so good. But to think that the
airlines will be back in business post recession is something I would not bet
on. In short term yes. In long term a resounding no.
Once in a while, to intrigue my students I toss a question
at them. It says "What Apple did to Sony, Sony did to Kodak,
explain?" The smart ones get the answer almost immediately. Sony defined
its market as audio (music from the walkman). They never expected an IT company
like Apple to encroach into their audio domain. Come to think of it, is it
really surprising? Apple as a computer maker has both audio and video
capabilities. So what made Sony think he won't compete on pure audio?
"Elementary Watson". So also Kodak defined its business as film
cameras, Sony defines its businesses as "digital."
In digital camera the two markets perfectly meshed. Kodak was
torn between going digital and sacrificing money on camera film or staying with
films and getting left behind in digital technology. Left undecided it lost in
both. It had to. It did not ask the question "who is my competitor for tomorrow?"
The same was true for IBM whose mainframe revenue prevented it
from seeing the PC. The same was true of Bill Gates who declared "internet
is a fad!" and then turned around to bundle the browser with windows to
bury Netscape. The point is not who is today's competitor. Today's competitor is
obvious. Tomorrow's is not.
Remember, if there is one place where Newton 's law of gravity
is applicable besides physics it is in electronic hardware. Between 1977 and
1991 the prices of the now dead VCR (parent of Blue-Ray disc player) crashed to
one-third of its original level in India . PC's price dropped from hundreds of
thousands of rupees to tens of thousands. If this trend repeats then
telepresence prices will also crash. Imagine the fate of airlines then. As it
is not many are making money. Then it will surely be RIP!
India has two passions. Films and cricket. The two markets
were distinctly different. So were the icons. The cricket gods were Sachin and Kohli.
The filmi gods were the Khans (Aamir Khan, Shah Rukh Khan and the other Khans
who followed suit). That was, when cricket was fundamentally test cricket or at
best 50 over cricket. Then came IPL and the two markets collapsed into one. IPL
brought cricket down to 20 overs. Suddenly an IPL match was reduced to the
length of a 3 hour movie. Cricket became film's competitor. On the eve of
IPL matches movie halls ran empty. Desperate multiplex owners requisitioned the
rights for screening IPL matches at movie halls to hang on to the audience. If
IPL were to become the mainstay of cricket, as it is likely to be, films have
to sequence their releases so as not clash with IPL matches. As far as the
audience is concerned both are what in India are called 3 hour
"tamasha" (entertainment) . Cricket season might push films out of
the market.
Look at the products that vanished from India in the last 20
years. When did you last see a black and white movie? When did you last use a
fountain pen? When did you last type on a typewriter? The answer for all the
above is "I don't remember!" For some time there was a mild
substitute for the typewriter called electronic typewriter that had limited
memory. Then came the computer and mowed them all. Today most technologically
challenged guys like me use the computer as an upgraded typewriter. Typewriters
per se are nowhere to be seen.
One last illustration. 20 years back what were Indians using to
wake them up in the morning? The answer is "alarm clock." The alarm
clock was a monster made of mechanical springs. It had to be physically keyed
every day to keep it running. It made so much noise by way of alarm, that it
woke you up and the rest of the colony. Then came quartz clocks which were
sleeker. They were much more gentle though still quaintly called
"alarms." What do we use today for waking up in the morning?
Cellphone! An entire industry of clocks disappeared without warning thanks to
cell phones. Big watch companies like Titan were the losers. You never know in
which bush your competitor is hiding!
On a lighter vein, who are the competitors for
authors? Joke spewing machines? (Steve Wozniak, the co-founder of Apple,
himself a Pole, tagged a Polish joke telling machine to a telephone much to the
mirth of Silicon Valley ). Or will the competition be story telling
robots? Future is scary! The boss of an IT company once said something
interesting about the animal called competition. He said "Have
breakfast …or…. be breakfast"! That sums it up rather neatly.
Source: From IIM Professor.
Visit www.appincoimbatore.com for more related articles.
