Earlier when you have to buy a Touch-Screen phone, say somewhere 3 years back, you had to shell more than 7-8k INR for a good quality touch screen phone. Android has just entered with few HTC High End phones. Tablets were about to get launched.
3 years down the line things have changed quite fast. In my latest post, you could buy a good quality touch screen phone with decent features at just INR 3k ($60 USD). The company, Beetel, has last month launched the cheapest tablet (Android Based) at just $200 USD. It wonders me why people keep on hitting bottom line, despite knowing that such strategies are not viable in long run?
Perhaps only answer could be just to make room & generate enough revenue by selling enough items to break even. By that time, after initial set backs, you are settled down in market. But hitting at bottom line or completely relying on pricing strategy is not going to take you anywhere. Some of the device makers are just doing the same.
One also interesting fact came to my notice that, the average life time of many high end devices like Apple Tablets or HTC Phones etc has been dramatically reduced to 2-3 years max. Companies keep on pushing new products with added features & upgraded versions of OS, making your investments obsolete is quite short time. In fact, when I bought my first Nokia device long back, I didn’t know that I would be dumping it down only after 7-8 years of usage, only just to stay updated with market requirements.
Will you be making an investment of, let’s say INR 10k or $200 USD (on avg) to find it obsolete in 2-3 years time? Investment of scale of more than 30K INR or $600 USD are going to linger on our table for quite long for quite obvious reasons. But considering that average life span of high end tech gadgets has been considerably reduced, how you best earn RoI from such off-track investment is quite important to see.
Another issue to tackle is product differentiation. When everyone in market is selling products based on Android 2.2, how your product holds edge over others is interesting to see. There’s little much can you do for this. After all, most of the hardware blocks including processors etc are easy to procure & place. Customization is the key but there’s little differentiation.
I would find the mobile devices market going similar way to that of Indian Telecom Service Industry has gone. They are betting too much on Android & Pricing to generate revenue. Look at Samsung, Reliance, Beetel, iBall etc. When entry barriers to markets are reduced considerably, there’s little remains to earn. You should expect flurry of objects trying to make room. That’s what exactly happened to telecom services & now few technological innovations in devices/software/semiconductor space are doing the same. After all it’s not bad to add new revenue stream but effectiveness of such business strategy pertains only in short span.
