Have Breakfast ….. or be Breakfast

-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 .

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 Nokia whose main line of business in India is not
cameras but cell phones.

Reason being cameras bundled with cell phones are outselling stand
alone cameras. Now, what prevents the cell phone from replacing the
camera outright? Nothing at all. One can only hope the Sony’s 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 m
ore 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 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
a" (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 – "
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 int
o 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 o
n 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 play
er) 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 Khan
s (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 emp
ty. 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" (entertainmen
t) . Cricket season
might push films out of the market.

ok 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
in 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 type
writer 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 las
t 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 h
ad 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?
Cell phone! 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 c
ompany once said something
interesting about the animal called competition. He said "Have
breakfast .or.. be breakfast"! That sums it up rather neatly.

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