Posts tagged 'Indian'

Indian e-commerce – nuances and challenges

Everybody and their grandma in India now knows that Indian e-commerce market is set to explode – it is expected to go from current 7 billion dollar (of which 6 billion is online travel alone) to 40 billion by 2015 – ie in 3-4 years.

In view of this, dozens of new ecommerce startups have launched in India and some of them are increasing market share at a breakneck speed. Some of these include Flipkart, Snapdeal, Exclusively.in, yebhi.com, babyoye.com, myntra.com and several others from large brands as well as startups.

But Indian ecommerce is not like that in the West – where online credit card payment and cheap shipping are the order of the day. India has presented these online commerce vendors with its own unique challenges – eg. :

  • COD : customers are reticent to use credit cards online. COD or Cash on Delivery is the preferred method for payment for most online sales.
  • Free Shipping : Indian online customers do not want to pay for shipping – as a result, Indian ecommerce vendors have to bite the bullet on shipping as well.
  • Categories for online shopping : Indian customers so far are mostly interested in online travel purchases – but when it comes to other products like toys, baby products, household items, books, music CDs and such, physical stores still take more than 99% of the customer pie. Of course, now electronics, books and apparel are some products gaining traction in online sales.
  • Where are the profits ? : Of course, it is well known that most India ecommerce startups are taking a loss on online sales – just to grow market share. One expects a market shakeout on this sooner or later and only the strongest (and well funded) ones will survive this fight to the top. We feel that the shakeout will begin to happen over the course of next year with several pulling the plug on their ventures or being bought out by other stronger ones.

Above list highlights some major challenges for the Indian ecommerce players. Enter Indian Jugaad – or Indian version of “make it work somehow“. New services like Gharpay and chottu.in have been launched to tackle the COD cash collection challenges, as well as product delivery in some cases. These services are building networks of collection agents in various circles or cities and provide Cash on delivery collection services as well as product delivery for the major vendors like Redbus.in, Myntra and Flipkart. Within months of launch, these services have signed  up many leading online vendors as customers.

Well – one has to admit – when it comes to India, it is all about “Jugaad Karo“. In India, if there is a problem, there is always a “Jugaad solution” lurking somewhere – it is upto creative entrepreneurs to find such gaps and exploit them to make new ventures.

December 14th, 2011

Book Review : “India Inside : The Emerging Innovation Challenge to the West” by Nirmalya Kumar and Phanish Puranam

“India Inside : The Emerging Innovation Challenge to the West” is a new book authored by Nirmalya Kumar and Phanish Puranam, renowned professors at the elite London Business School. The book is published by Harvard Business Review Press and released in Nov 2011.

This book is about the “invisible” innovation which India today provides to a multitude of corporations and entities around the world. The book starts with questions like “Where are the Indian Googles, iPods and Viagras?” and “Can Indians innovate?”. Valid questions but which make slight of the fact that innovation is much more than consumer facing direct innovation. Indian ingenuity is enmeshed in so many products other multinationals make – likes of GE, Microsoft, IBM, AstraZeneca, Intel, Motorola and many others.

Globally Segmented Innovation :

As Western firms have outsourced large parts of the IT and research work to their Indian divisions and R&D labs, the skill profile of the Indian worker is increasing and firms are increasingly entrusting them with higher-end tasks. In this regard, the authors talk about the Skills Ladder concept – which says that when one creates an army of talent at the bottom of the product development pyramid, it is likely that innovation leaders emerge from this lot and remain in the geography where they are situated – as such, one can say that, thanks to Western outsourcing, a huge no of Indian engineers and innovators are being trained and are likely to boost the local innovation ecosystem via new entrepreneurial ventures or contributions to domestic economy.

In short, there is a talent shift to Asia from the Western hemisphere, which in turn will lead to accelerating growth and innovation in that part of the world.

Outsourced R&D :

For multinationals, Indian service providers like Wipro, Infosys, Tata and HCL are conducting outsourced R&D in labs all across India. Wipro pioneered the concept of outsourced R&D with it’s innovative Product Engineering Services division or PES starting way back in early 80s. Infosys products like Finacle and others like i-Flex have become global leaders in banking and finance. Outsourcing of R&D to India-based outfits creates talent pools in that part of the world and self-perpetuates further innovation and increased western investments.

Process Innovation – An Injection of Intelligence :

Indian call centers are often staffed with folks who are normally more qualified than a mundane call center job. This has caused the so called “injection of intelligence” into the mundane call center and BPO processes – processes which the Western world had written off as commoditized and boring. As a result, call center outsourcer 24/7 is injecting analytics-driven market intelligence into customer service calls and interactions – thereby increasing web / phone consumer loyalty and conversion rates. Higher qualified Indian talent is converting routine BPO processes into more strategic higher-value initiatives for western clients, thereby increasing ROI on outsourcing even more.

Management Innovation – The Global Delivery Model :

Infosys and other Indian IT firms have pioneered the global outsourcing and cost efficiencies which can be achieved in large projects. Saving costs and making the process faster, leaner and efficient is certainly innovation in it’s own right.

Visible Innovation – Frugal Engineering :

The emerging Asian middle class is known to demand and desire Western style products at cheaper cost. The Indian concept of “Jugaad” - or an ability to make do with less resources and still get things done, is now finding acceptance as a strategy in global Boardrooms. Tata Nano (and more recently Aakash tablet, I might add) are changing the debate of value vs cost. Developed markets are fascinated by Indian creations like Tata Nano and are studying such models closely to see how a quality mass market product can be developed at such a lower cost.

The authors also acknowledge the India’s innovation challenges eg slow bureaucracy, lack of infrastructure, lack of capital and population’s risk-averse nature. However, the Indian innovation train has started and few can turn the clock back now. As such, authors provide recommendations to both Indian and Western firms as to how to leverage or face the oncoming Indian innovation onslaught. We highly recommend this book to those who are interested in learning about the India’s growth and innovation story.

CellStrat Book Rating : **** (4 out of 5 stars)

December 1st, 2011

Welcome to the Cloud !!

At the Apple’s WWDC event on June 06, 2011, Steve Jobs unveiled the “iCloud” – Apple’s answer to the Cloud Computing fever which sweeps the world. The stock of Salesforce.com – the first B2B SAAS service which houses all your CRM and ERP data in those massive server farms around the world, has gone vertical since its debut. Cloud Computing, SAAS (Software as a Service) and Online Media Lockers are real and happening at a breakneck speed. Amazon and Google released their online music and media lockers to much fanfare and Apple has followed suit with it’s iCloud offering.

Apple iCloud

Businesses have adopted online CRM and ERP applications offered by Salesforce.com, Oracle and Microsoft. Microsoft Office 365 – Microsoft’s online Office suite is a Cloud-based product and is due to be debuted end of June ’11. Business applications and documents find their new home in the Cloud and the transaction models have evolved from licensed software to Subscription services.

The whole idea of Cloud-based Apps and Content envisages universal access from all devices including PCs, phones, tablets etc (TVs to be added in near future). In other words, smartphones and tablets are integral part of the access channel for Cloud services. The front-end in Mobile phones and tablets in such cases are either Apps or Mobile websites, underscoring the relationship of Mobile Apps/Web with the Cloud. Speaking simply, a mobile app may simply be a door to a cloud-based service, product or content.

Such cloud infrastructure, of course, assumes high availability of networks and fast speeds as in case of 3G or 4G services. So far, these issues have not been a major bottleneck in the rise of Cloud Computing.

Cloud Computing in the consumer arena has a profound impact on Media and Content industries. The illustration below depicts these changes.

Impact of the Consumer Cloud

 

June 10th, 2011

Event Roundup from Mobile Apps Conclave, Bangalore

Mobile Apps Conclave – the conference organized by CellStrat concluded successfully on 29th April, ‘11 at The Chancery Pavilion Hotel, Bangalore. The Conference saw tremendous interest with a large no of audience from all over India. The star-studded speaker lineup and intuitive content on Mobile Apps and Web fueled interest in this event. The theme for this event was : “The Mobile Web Disruption – Life, Media and Business get Appified”.

In addition to Bangalore, audience came from cities like Delhi, Mumbai, Hyderabad, Kolkata, Ahmedabad and Chennai, both from brands and senior management of companies as well as the developer community.

More than 200 blue-chip audience participated in this event on the hottest topic in modern times – Mobile Apps, App Stores and the Mobile Internet. Most brands, mobile device manufacturers, app store and app development firms were present to learn about the Business of Mobile Apps and Web.

Details of the event and photographs are available at http://www.mobileappsconclave.com.

Event Brief :
The Mobile Web – the new name of Growth around the world. Mobile Internet Tsunami – as many refer to it.

Mobile is the industry of this decade. Mobile has taken world by storm. The feature phone growth is fast evolving into smartphone growth driven by the emergence and popularity of The Mobile Web and those tiny ubiquitous Apps – hundreds of thousands of them literally. Mobile Web is upending so many industries, it is breathtaking to say the least. Many of these businesses are succumbing to the trend which the venerable firm Apple started – businesses like news and media, advertising, gaming, productivity, publishing, telecom, entertainment, commerce, financial services or healthcare..the list goes on and on. Whoever you are, wherever you are – either have an App and Mobile Media strategy or be prepared to loose substantial traction in the marketplace – because, indeed, your customers are App savvy even if you are not.

You are on the road and want to check nearby promotions, there are many apps for that; you want to track your supply chain, many apps for that too; track Social Network updates; many apps there as well; there is even an app for Confessing to God. Apps are orchestrating the growth in intelligent smartphones; next playground is Tablet followed by Computers. Are you ready for the brave New World of Mobile and Mobile Tablets ? Are you ready for the Mobile Web revolution ?

Conference Sessions :
Here are some notes from the Keynotes and Panels that transpired at this event.

In the morning session, there was an intuitive keynote by Pratapa Bernard, Vice President and Head – COE – Data Services (Emerging Markets) at Vodafone. He addressed the impact of the Mobile Web and Apps on the modern consumer and businesses. He mentioned the imperative need to focus on user experience and not technology itself citing the example of Apple etc. He went on to say that 80% of internet access in India in 2015 will be from mobile devices.

Next came a panel on “Mobile Apps go mainstream – Content, Engagement and Lifestyle on Mobile Apps”. This panel discussed the Mobile App revolution and how Content and Entertainment is being delivered via Apps. The panel speakers included Rajiv Kumar (CEO – RockeTalk), Deepak Swamy (Head – Flypp App Store, Infosys), Sanjay Bhasin (VP-Getit Info Services), Vikram Tanna (VP – STAR Digital), Rajesh Reddy (CEO, July Systems) and Narasimha Suresh (CEO – TELiBrahma). This panel focussed on App monetization and how developers are finding it a challenge to monetize their apps. This panel also discussed the need to “Indianize” the Western business models, cost structures as well as offerings to make them work in India. On HTML5, the panel members said this new standard will be big against Mobile apps but the “when” is not clear yet.

After the first panel, there was an interesting keynote by InMobi (top Mobile Advertising firm) executive Sridhar Ranganathan (VP-Product Management) on how market pressures are forcing firms like InMobi to push the boundaries of creativity with immersive advertising and the need to think of Mobile Ads like mini-apps. He mentioned the need to un-learn the PC and focus on Mobile as a separate experience.

In the afternoon session, there was an innovative keynote by Sunny Rao, MD – India and APAC of Nuance Communications. Sunny spoke about some of the innovations in Mobile Web world surrounding Speech Technology, Voice-based Social Networking and automotive vehicles as mobile channels. Sunny’s keynote was followed by an interesting panel on innovations in Mobile Apps and Mobile Web. This panel had some true Mobile innovators in Amiya Pathak of ZipDial, Kalyan Manyam of MojoStreet, Indus Khaitan of Bitzer Mobile and Soumitra Sharma of IDG Ventures. This panel discussed specialized vertical Apps which are popping up in industries like Payments and Commerce, Social Gaming, Healthcare and Education.

The Mobile Innovations panel was followed by a Startup showcase where Sriram Mohan, Associate Editor at YourStory.in helped introduce some startups which are creating innovative business models in the Mobile App ecosystem.

The last (but not the least) panel was on Emerging Devices and Tablets. Advent of Apple iPad has opened a whole new world of possibilities and truly heralds a world of post-PC era. Prabha Aithal, CTO at CanvasM moderated a panel of speakers which included Alap Ghosh of Mobango (App Store), Pradeep Rao of Research in Motion, Ashish Gupta of Helion Ventures and Dr Sharad Jaiswal of Alcatel-Lucent Bell Labs. This panel discussed the impact that the tablet and emerging devices are having on the ecosystem. Emerging Devices is a hot new area and is seeing digitization of content at a blistering pace from a variety of industry verticals like publishing, entertainment, retail, media etc..

Conference Partners :
Overall, it was an action-packed conference with active participation from speakers and audience. Partners included Presentation Sharing Partner authorSTREAM on which the presentations by CellStrat, event speakers, exhibitors and partners can be found. The Mobile App Partner, Hazel Media provided an event app for this conference. Whereas the Mobility Partner, MobiVite published a Mobile WAP site for the same.

InMobi was the Platinum Sponsor for this event. AgileCO was the Gold Sponsor. Other supporters included partners like MOMO Bangalore, The Morpheus and Indian Angel Network (IAN). Media Partners include the online media firm YourStory.in and TelecomLead.

YourStory.in was a Premium Partner for this event and it provided online media visibility as well as Anchor support for the event.

Mobile Solutions Expo :
This conference also saw an interesting exhibition on Mobile Solutions where some innovative app companies exhibited their apps and solutions. This Expo dazzled the audience with some interesting apps and solutions in the Mobile space. The exhibitors included WINIT, Nanostuffs, RockeTalk, Bitstream, Softtrends, MobiVite and some others.

For photos and other details from the event, check the event website at : http://www.mobileappsconclave.com.

Shyam Kamadolli (Director – Fidelity Growth Partners India) was one of the attendees and has some intuitive notes from this conference on his blog : http://skamadolli.wordpress.com/2011/04/29/india-mobile-apps/.

May 16th, 2011

TV Everywhere – access Video and Movies on the go

I recently attended a TV Everywhere session where there was a discussion on the evolution of the Television and Video industry with the advent of IPTV and Mobile access devices.

Clearly, TV Everywhere is a a huge trend and there are many factors driving this trend :

  • Broadband

Today one sees DSL and Cable Modems have replaced the erstwhile Dial-ups. The 312 KBPS+ bandwidth running upto 50 MBPS for high end Cable modems in advanced economies (speeds in India top out at 1.5 to 3 MBPS etc for most providers) is enabling the ability to access high-speed graphics, video and gaming content from home and work computers.

Firms like Netflix in the US and Canada have figured out compelling business models to stream movies over the internet and are threatning the traditional movie rental business and regular cable television.

India’s broadband penetration rate is woefully small and speeds are still on low end of the spectrum, so Live TV Streaming in India is still a very niche industry. However with the expected surge in internet penetration expected over the next decade (some estimates put India’s internet penetration at 30% households in next few years), the IPTV and online TV streaming is expected to surge. Firms like seventymm.com which have led the online DVD rental business in India (India’s Netflix) will likely evolve into movie streaming firms as India’s broadband penetration takes hold, similar to what Netflix has done in the United States.

  • Mobile Connectivity

Broadband sticks and Laptop connect cards (offered by most carriers) enable the laptops and tablets to be wirelessly connected over a reasonably fast GPRS/UMTS/3G network – with the advent of 3G in India, this pattern is sure to accelerate.

Consumers today are demanding YouTube and Cricket streaming video from their laptops, smartphones and tablets. Content providers and distributors have to oblige if they hope to keep these consumers engaged and commercially viable.

For India, Mobile is specially important as it has close to 800 million Mobile Subscribers already. Granted that more than 90% of these are carrying feature phones and using the 2G/2.5G networks, smartphone penetration rate is accelerating and wireless tablets are being introduced as well by a variety of handset firms. Between the smartphones, tablets and 3G, one is looking at increasing Mobile Video and TV access over the airwaves in the coming years.

  • Consumer behaviour

As mentioned above, Consumer is the King. With proliferation of devices around the home and on the go, plus busy urban lifestyles, consumers are demanding DVR recording capabilities as well as anywhere, anytime access to their favorite programs. A common trend in many households, which have acquired the new tablets like iPad, is that as soon as the first tablet arrives, members of the household including parents and kids make a grab for it and want to curl up in the bed with their favorite channels on YouTube, Netflix or other streaming services.

TV Everywhere is a developing trend and is being demanded by the consumer. Entertainment and Media industry are happy to oblige – to drive new revenue growth and keep the customers engaged with the brands.

What are the prominent TV and Video Streaming services in India :

  • CNN-IBN Live : TV Portal as well as Live TV
  • NDTV 24×7 : TV Portal as well as Live TV
  • In.com : Has a Video Social Network (not live streaming generally)
  • CNBC TV18 / moneycontrol.com : Business news streaming
  • ESPNStar.com : Video Portal (not live streaming) – has lot of Cricket coverage for World Cup and IPL
  • YouTube / Indiatimes.com : streaming ICC World Cup as well as IPL cricket matches
  • Nautanki.tv : currently it’s website is not accessible (so not clear on it’s status)

April 16th, 2011

Local Search and Coupons explode : the rise of Groupon

Much is being talked about the rise of Groupon, LivingSocial and other such Daily Deal / Group Shopping outfits which have emerged on the scene within the last 1 to 2 years. Many stats claim that Groupon may be the fastest growing company in history. What is the big deal about Local Search and why is it so hot ? In this article, we examine this trend and the factors driving its explosive growth.

Groupon is changing the face of Commerce

Groupon, LivingSocial and many other like firms have figured out the secret sauce in Group Shopping experience. Group Shopping is not new or innovative in any fashion. Many outfits tried this in the prior dot com craze but it did not take off. Why now ? It’s the rise of Social Networks and Mobile Connectivity – something that we often refer to as “Mobile Social” or “Social Mobile”. Between the Facebooks and Twitters of the world and breakneck growth of Mobile phones, we are looking at Group Shopping proliferation like never before. The basic idea of Group Shopping is obviously that such sites promise to increase the foot traffic to local retailers and merchants by offering daily deals to scores of public. By spreading word about such deals using Mobile Apps, Social Networks and general Buzz Marketing, such sites have grown rapidly.

Groupon is said to have a $25 billion valuation already. Groupon is, of course, rumored to be working on an IPO at this valuation. Groupon had, earlier, rebuffed a $6 billion offer of acquistion from Google!

Late last year, LivingSocial accepted a $175 million investment from Amazon. Certainly, the big internet firms are watching this space with keen interest and would like to take part. Facebook, not to be left behind in this hot area, is about to launch its daily deals service in some cities across US.

The business model deployed by firms like Groupon and LivingSocial is to hire local sales staff in all major metropolitan areas and send coupons for local retailers to audience in the respective cities. With intuitive Mobile Apps on iPhone, Android and other platforms, sending such deals has become easier than ever. So we have the business model and we have the distribution via Mobile phones and emails – in sum total, we have the secret sauce of Group Shopping and modern commerce.

Group Shopping getting crowded

The problem with such Group shopping experience is that there is low barrier to entry. All it takes is a big field sales force in major cities, cool mobile apps and websites and word of mouth marketing. As a result one sees such models cropping up daily, almost at the rate of one new firm per day. Who will win this area eventually ? So far Groupon is winning it and so is LivingSocial. Others are either not that well known or are too new to make a dent. That is why Google tried to buy out Groupon rather than invest in its own model ( After the Groupon rebuff though, Google decided to launch its own daily deals business under the brand Google Offers ).

While others are new to the market or not that well known, eventually this field will be dominated by firms which can continue to grow rapidly and build out the sales capabilities in cities nationwide. Ultimately, this will be a business about economies of scale. Likely winners include Groupon, LivingSocial (with its Amazon backing), Facebook and Google. Most other firms will not be able to reach the economies of scale needed to succeed in this area.

Not all is hunky-dory in Group Shopping

Collective buying is touted as Win-Win for all. There is nothing farther from the truth. Many retail partners of Groupon and such sites have complained of squeezed profit margins, shift in customer buying patterns and constant bickering with Groupon sales teams who are trying to sell them on deals and driving down prices. Consumers have often found, much to their chagrin, that prices offered on Group Shopping sites, were higher than what they would get otherwise. Moreover, often times such sites highlight discounts that customers can get any way through other means.

The retailers are becoming savvy on Groupon and are requiring a lot of fine print and exclusions on Group deals, things which consumers usually miss why buying such deals and tend to suffer later. In some cases, consumers who bought these deals have found that there are exclusion days or spa appointments are sold out for a long time. This area is getting messy for sure, where all stakeholders – daily deal sites, retailers and consumers are playing the negotiation ball harder and harder.

Group Shopping craze comes to India

After seeing the breakneck growth of Groupon, firms in India and China were quick to copy the model. India has seen dozens of such sites crop up – prominent among these are SnapDeal, KhojGuru, SoSasta (acquired by Groupon), BuzzInTown etc. Groupon did not waste time in expanding internationally – in China, it launched GaoPeng.com in partnership with Alibaba founder Jack Ma. In India, Groupon scooped up local firm SoSasta.com.  “Collective buying is in its infancy in India, Israel and South Africa and we see strong potential,” said Groupon’s president and COO Rob Solomon, “Groupon is shaping the way local merchants market themselves in every corner of the world.”

But growth in India is not a cakewalk and differs vastly from that seen in the West. India has less than 10% internet penetration (broadband penetration being around 1%) and less than 10% smartphone penetration – both of which are the primary drivers of success for firms like Groupon in the west. In India, commerce is dominated by the local retailers and merchants who control more than 90% of the shopping market share. Groupon / SoSasta are using India-specific models like variations of Cash-on-delivery (COD) where cash can be picked from homes for deals purchased. Moreover, the margins in India are much smaller than those in the West for Group Shopping firms. Also India already counts more than a dozen such outfits (or similar to a large extent), so competition is already intense for what is still a small market for Group Shopping.

Firms like SnapDeal have become popular in India touting vacation packages, spa experiences and high-end fashion products. Bottomline is that, in India, group shopping has still some ways to go before it becomes a substantial revenue opportunity. Firms which can last and build scale for a long time in India will ultimately be the ones which win. The usual winners from the west like Groupon, Facebook and Google will likely do well in India over time as these firms have the heft to ride out slow growth typical in markets like India.

Daily Deal innovations

Group Shopping is about to enter Phase 2. Groupon is fervently preparing for its most ambitious venture yet: the launch of a new mobile application that the company hopes will change when and how society chooses to eat, shop and play. Groupon is about to launch an app called Groupon Now which will have just two functions : “I’m hungry” and “I’m bored” – on clicking any of these, the user will be presented offers for nearby cuisines or entertainment experiences as the case may be. By simplifying the user experience in this intuitive way, Groupon aims to capture the Commerce market even further – this will likely solve the problem of perishable food in restaurants or empty seats at a show – wherein the merchant publishes last minute offers on Groupon Now. It is foreseeable that these two ideas will become standard buttons on some smartphones of the future (just like Facebook has become on some phones). It won’t be long until we find out if Groupon Now is the future of local commerce; the mobile app launches in April.

LivingSocial, on it’s part, has an option where if a user gets three friends to buy the deal, the original user gets the deal free – this is about reference shopping. The Collective Buying area will continue to see experimentation and new players for now, or at least until those lofty market valuation increases start to stabilize.

March 30th, 2011

“Year of the Tablet” – notes from Wireless Technology Forum (Atlanta) session on Tablets

(from our Atlanta desk)

It is commonly said that this is the “Year of the Tablet“. Certainly, with Apple iPad, Samsung Galaxy Tab, Motorola Xoom and dozens of other tablets and eReaders being introduced in the marketplace, everybody is talking about the “post-PC” era and the impact of tablets on consumers and businesses. Tablets are causing upheavals in the Publishing and Media industries with most major Newspapers and Magazines plotting a Tablet strategy for their periodicals. Netflix and other Streaming Entertainment providers are booming due to the surge in Tablet access subscriptions. Book Publishers are digitizing their books at an increasingly rapid pace expecting a shift away from Printed Books to Tablet or eReaders. 80% of Fortune 100 companies in the United States are trialing iPad for their Corporate employees. Laptops which were hyper-growth computers for the first decade of this century are making way for the Invasion of the Tablets.

Our analyst in Atlanta attended an intuitive session on Tablet computing at the Wireless Technology Forum, Atlanta on March 17th, 2011. Here are the notes from this session :

Speakers :

Mike Lupo, Sr Director – Digital Products, The Atlanta Journal-Constitution (AJC)
Karen Truitt, Director – Mobile Devices, Intel
Chuck Rainbow, Technical Manager – Tablets, Research in Motion
Jim Dudenhoefer, Manager – WebOS, HP Palm
Moderator : Dr. Phil Hendrix, Director, Institute of Mobile Markets Research (IMMR), Atlanta

 

A great cast of speakers from top contenders in the Tablet space (the 800-Pound Gorilla, ie Apple, was missing, so was Google). This session focused on the tablet form factor, the applications that will drive adoption and the business models needed to support this new networking paradigm.

(All data below refers to USA Tablet Market)

Dr Phil : Tablets have almost 5 to 7% penetration right now – it is currently one of the fastest growing Consumer Electronics products.

IMMR (Dr Phil’s organization) recently concluded a survey on the Tablet ecosystem. On the question of “Familiarity with Tablets”, here are the stats :

  • On the question of “Familiarity with Tablets” :- 38% audience – somewhat familiar; 26% – very familiar; 35% – not familiar
  • Smartphone familiarity is higher than feature phones in households.
  • 4 in 10 people are interested in purchasing a tablet for someone in the household. Once the tablet comes into the household, it tends to get shared. Over time, some households may become multi-tablet households.
  • Lower prices will unlock demand. $500 is the breaking point for most folks when they get discouraged from spending on tablets. iPad is at a higher price point but has still sold like hotcake – this is due to Early adopters, who are buying high end tablets today. But significant opportunity exists for cheaper tablets below the $500 threshold.
  • Preferred Tablet OS :- Apple iOS – 58%, Windows OS – 36%, Android OS – 35%, BlackBerry – 13%, HP Palm – 9%. Interestingly, Windows OS beat out Android slightly.

Mike (AJC) : AJC Newspaper has just developed its iPad App and it is currently in Beta. AJC also has an iPhone/iOS App called AJC Digest which is available on App Store today.

Karen – Intel, which is a strong leader in the PC microprocessor industry so far, is looking to expand into tablet microprocessors, chips inside cars, etc.

Jim – HP had acquired Palm recently and HP plans to deploy the Palm WebOS in many of its tablet devices over the years.

Chuck - RIM is about to release its Tablet play titled “Playbook”. There is much excitement within RIM with this upcoming launch.

Dr Phil - Why now for tablets ?

Karen - Apple has created the game-changing device in iPad. Apple is a master of simple products that work well. They made the Mobile Device, App and App Delivery ecosystem simple enough to allow for a mass market adoption.

Chuck – Tablets are now because chip processing and battery power has reached a point where these devices are possible (our take on this : RIM won’t admit to Apple’s role in opening this market :). These devices are now feasible. We are reaching an inflection point where tablets can substitute for laptops, devices which are anyway more difficult to lug around. People are not getting acclimatized to these devices.

Jim- Consumers today demand anywhere access to content and data. Tablets are just another end point in this evolution. It’s about data access – moving it to the cloud and the desire to access it from anywhere. Phone screen is too small to allow an optimal experience for this. Jim also noted that they are not concerned about Apple’s dominance so far. Jim has a great point of view that, if at all, Apple has been a positive contributor in creating a huge new market for all device makers to play in. Jim said market is huge for many to thrive. This is a market where all boats can and will rise. (Good point)

Mike - In an average American home, people think of tablets as lean back experience whereas PC is work – so tablets make sense now for AJC. Newspaper is about relaxing and consuming the news. So it makes sense for AJC to work in tablet space.

Dr Phil – The 800-pound gorilla (Apple-who else) is not in this session. Where is the gap in Apple’s tablet strategy which others could potentially exploit ?

Karen- Apple has created the benchmark. Everybody else is trying to catch up to that. Android Honeycomb from Google is an attempt to catch up to the iPad benchmark. However the user experience of Android still has to mature for it to be a strong contender. AS to Apple’s weak points, Flash is certainly one – a blatant omission from the likes of Apple. (Karen admitted, however, that Apple does not consider lack of Flash in iOS devices as a weak point).

Chuck- Apple is weak on security. There is a security breach every 4 hours in Apple iOS environment. RIM / BlackBerry is known for security (note that BlackBerry is still dominant smartphone in the Corporate world). Mobile Device security is critical area – virus maker McAfee has smartphone security software today. Apple does even acknowledge the security issue in its iOS environment. Chuck said that until something goes wrong, people don’t take notice. Consumers will start getting concerned when they loose credit cards etc in Apple environment (CellStrat note : Note that Mobile Payments is about to become a big area and here security is of paramount importance).

Jim - Apple is consumer-focused firm. There is lot of opportunity in Enterprise and niche verticals (where the field is still open for all) in addition to the huge consumer opportunity.

Dr Phil : Avg selling price in 18 months?

Mike – 350 or 300 dollar will be great.

Dr Phil - Newspaper in Canada is giving away iPads if folks buy newspaper subscriptions. Will Atlanta Journal Constitution adopt this approach ?

Mike (with a chuckle) – No (resoundingly!)

Karen - Intel has created  tablets for healthcare verticals. Businesses will want ruggedized versions of tablets (a delicate iPad device will not work in many industries) – these devices may get dropped and used in rough conditions in various industries.

Dr Phil – Amazon (Kindle) and Barnes & Nobile (Nook) eReaders will have more and more of tablet functions over time as the boundaries between eReaders and tablets will become indistinguishable. Printed Books may become redundant. Tablets will take over though it will take some time.

Q/A :

Ques : Will HTML5 replace Flash?

Dr Phil - Depends on how quickly content makers adapt.

Ques : Where is the money?

Karen – Apple is making money and also App developers. Carriers are making money also because of rapid growth in Data plans.

Jim- Dynamics of the industry is changing. It is still wide open to pin down the business model. Revenue Models are evolving still.

Chuck- When the PC came around, money was in hardware sales. Then, software became more important and apps like Microsoft Office made money. A similar ecosystem will evolve in Mobile Devices (implying mobile device hardware will make money followed by software over longer term).

Ques : What about accessories business ? The new Apple Smart Covers for iPad 2’s is all about margins (for Apple). Will USB attachments and such accessories be a lucrative area ?

Chuck - Ultimately Bluetooth will be dominant. Apple model of side-loading will be replaced by Cloud services. (Chuck said that in spite of this, Blackberry Playbook will have USB and HDMI port to cover all bases).

Ques : HP Palm strategy to win over developers given Apple’s popularity in Developer ecosystem (50,000 Apps already available customized to Apple iPad and HP Palm has hardly any, so far) ? After all Developers make or break Mobile platforms. Also, Apple deducts a large chuck (30%) from Developer App revenue as commission.

Jim - HP talked to a lot of developers and they are struggling on revenue generation with the Apple App Store or even the Android Store. Certainly there is room for developer innovation here in terms of Business model which helps them.
HP’s strategy will be to be as open as possible (Open Mobile environment) – ultimately this will help Developers. Eg Kindle Book Store will be available on HP Palm – this means that HP Palm Tablet will have 800,000 Kindle Books available from the get go. Also, HP will offer both models in its App ecosystem – the App store approach for mass market as well as Private distribution for corporations.

Chuck – Even though Apple iPad has 50,000 custom Apps, most are trivial (he referenced iFart apps on Apple Store:). Average Usage per app among the 50K apps (on iPad App Store) is less than one day. RIM / Blackberry has much higher average usage of its mobile apps. (our take : Good point but can one discount the mass Developer and Consumer Crowd running after Apple ?)

Ques : On Tablets replacing PCs ?

Karen - Tablet is a consumption device. It will do well but won’t replace PCs/laptops. PCs will always be ahead in graphics and processing power.  So tablet will not replace PCs/laptops that fast (our take: they better not – else Intel’s primary business is in jeopardy :) 

Overall a great session on Tablets. Kudos to the folks at Wireless Technology Forum (Bob, Steve, Maury, Scott, John, Ed and others) for organizing this event.

March 18th, 2011

Mobile Conclave’10 comes to an end…

The Mobile Conclave was organized by CellStrat and Amity Innovation Incubator at Amity University campus in Noida on 22nd Jan 2010. The conference saw dignitaries from the mobile industries presenting their views, optimism and apprehensions on future of mobile advertising and VAS. The conclave was kick-started by Vivek Singhal (CEO, CellStrat), he presented the facts and trends prevalent in recent times in the mobile industry in India and abroad.  Vivek was followed by Milind Pathak, Vice President of Comviva who talked about various key issues and aspects facing the Indian Mobile Media environment and service providers.

The first panel deliberated on “Mobile Advertising in India: Today, Tomorrow and Beyond”. The main debate happened around the point that mobile penetration is almost ten times the penetration of internet and substantially more than any other form media, but can mobile as a media can be compared to other traditional advertising medium- TV, radio and print. The panelist were not very judgmental on future of mobile advertising because of some hindering factors like small screen size, low speaker fidelity and penetration of high end multi media phones. The successful role of 3G services are what everyone is looking out for which would for certainly enhance the multimedia experience of the consumers and that would give the much required fillip to the mobile as an important advertising medium. Currently the new advertising media contributes to only 1% of the total advertising pie, which for certain is going to increase, as per the panel members.

The second panel had their discussion focused on “Mobile Value Added services”. The panelist had representatives from VAS producers and mobile service providers. It was interesting to know that there were around more 200 VAS services available in the market, but far too less are subscribed, mainly it’s the ABC (Astrology, Bollywood , Cricket)  trio which have succeeded, so the mobile service providers have to look out for ways to promote the other Value-Added Services which are more relevant for the consumers to subscribe. M- Commerce which includes mobile banking, mobile money and mobile payment was agreed upon as one of the VAS services which have a lot of potential in the market. Mobile social aggregation was also touted as one service which could become popular amongst the mobile trendy younger generation.

The third panel debated the Mobile Web and Mobile Apps ecosystem in India. The panel said that while the West has seen the likes of venerable iPhone create a robust Mobile Apps environment, Indian market is still to mature on this front due to lack of 3G services and high-end handsets. Two panelists from top GPS firms (MapMyIndia and SatNav) listed the opportunities in mapping apps in India and recognized the lack of mapping data in the Indian context. The panel agreed that Mobile Apps is the future of Mobile growth in India especially in the urban segments and India-focused App Stores are now being announced. The speaker from Spice Digital Vinish Kathuria announced the Idea Telecom App Store developed by Spice. All panel members agreed the Western Models like the Apple App Store need localized apps to take off along with high-end smartphone growth before the apps space will become a bigger market in India. But all agreed that this phase is round the corner with 3G spectrum to be conducted soon and several home grown App Stores in the process of being launched now.

The next panel was on VC and Angel Investing in the Mobile and Telecom space. As expected, the audience had plenty of questions on what the VCs are looking for in the startup space where they would like to invest. All the Venture Capitalists were stressing on one point :- however innovative the idea is, if it is not scalable to at least pan- India level or a large enough scale, then it’s fairly hard to attract investors – VCs are looking for scalable viable models which have been proven to some level of success at least. “A man and a plan” strategy without a working prototype and no customers typically will not see investors who want to invest in the venture.

February 1st, 2010

Bharti’s Comviva launches multiple SIM technology

Comviva (formerly Bharti Telesoft) is in talks with several telecom service providers, including group company Bharti Airtel, to launch a SIM (or Subscriber Identity Module) card that allows up to 10 users to share the same mobile phone with their own specific numbers.

The technology requires the user to dial a given number from the specific mobile phone and activate the SIM though a password. Once that is done, the user can receive and make calls and even recharge the account through a pre-paid coupon.

Rural teledensity in the Indian mobile market stands at just 20 per cent, compared with an urban teledensity of 95 per cent, suggesting wide scope for expansion. Thus, Comviva hopes to sell the technology to operators and launch the services by the end of this year. “The technology will help operators increase penetration in the rural markets and increase their revenues,” said Comviva CEO Manoranjan Mohapatra.

(Soure: Business-standard)

December 11th, 2009

IIT-Chennai develops multiple language SMS platform for mobiles

IIT-Chennai professors finally succeeded in getting carriers and Telecom Regulatory Authority of India (TRAI) to agree on adopting their newly developed multiple language SMS capability. This platform will enable people to send sms in all 22 Indian national languages including Telugu, Malyali and Assamese.

Recently, I had written about Panini, the virtual keyboard software (which can type 9 Indian and some foreign languages) devised by another start-up from North India. Now, it will have competition but I think 1 year is quite good time to promote it extensively though now it will be directly to consumers only as operators may not take it onboard when they have already agreed to bring IIT-Chennai’s product on board.

1 comment October 6th, 2009

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