Have breakfast or be breakfast!


Who sells the largest number of cameras in India?

guess is likely to be Sony, Canon or Nikon. Answer is none of the
above. The winner is Nokia 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 Nokia and
Bharti (Airtel’s parent) are breathing easy you can’t be farther from

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?”

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.

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 videoconferencing 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
videoconferencing 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. 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 Sehwag. 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.

—Dr. Y. L. R. Moorthi is a
professor at the Indian Institute of Management Bangalore. He is an
M.Tech from Indian Institute of Technology, Madras and a post graduate
in management from IIM, Bangalore.


3 responses »

  1. very interesting indeed. have thought about this lapsing out of products and technologies many times myself. one example that i’ve always felt sad about are the pagers. remember those beep beep beep devices 🙂
    anyways, i would also suggest you to write ur blog posts. for example, in this one, you could have quoted doctor moorthi and wrote ur own views on the topic. by the time the reader i scrolled down, i felt not good that these were someone else’s views and you have not written anything or expressed ur views at all.
    best regards,

  2. Very nice comment adee. Charu, your opinions are very funny. We’d like to read more about your take on the issue rather than somebody else’s.

    Blasted Idiot.

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