February 03, 2008


Ignore India and China at your own risk

Motorola, after reporting massive drop in profit, is thinking of spinning off its cell phone business. And this happens when the market leader Nokia posts very strong results.

So, what's the difference? Here is one dimension. Motorola is paying the price for ignoring emerging markets, China and India, specifically. Five years back, when Nokia was flooding the market with new handsets Motorola had only couple of utterly ugly and unusable handsets as competition. It simply showed the lack of commitment on the part of Motorola for Indian markets. Guess, which company will be benefited with India's mobile subscriber base is quarter a billion and growing.

Apple is probably also making the same mistake. Its talks with China Mobile failed, supposedly due to Apple playing the big brother. Apple could do it with telcos in developed market as for them iPhone was much needed drug. But in emerging markets telcos are doing fine. China Mobile acquired 300 million subscribers without the help of Apples of the world (may be with the help of Govt.) Apple needs to come down from its high pedestal because the numbers we are talking in India and China are huge. A 5% market-share of handsets doesn't look too high for iPhone in India. (The stinking trash that is being sold at Rs 15,000+ doesn't come close to iPhone which sells at same price.) Even at 5% we are talking about more than 10 million units.

Idea courtesy: Shyam's post about IBM's looking to grow outside US.


Shashikant ... you need to read more on Apple. China Mobile and Apple have both confirmed they have not started discussions about an agreement. Jobs said this at Macworld and a few days later the CEO of China Mobile said he is open to beginning discussions.

I'll surely read more about Apple and China Mobile. But, as you can understand, generally, there won't be much coverage if the deals don't go through. I would really like Apple to sign deals with major carriers in India and China. Till then, I will have my reservations about Apple's commitment to India and China.
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