New Delhi: The crowded Indian smartphone market, which currently has over 20 brands selling their devices, will not be able to support more than six successful firms in the long run, said former CEO of tech giant Apple, John Sculley.
Sculley, who has also served as the President of the soft drink giant PepsiCo, said his own firm Obi Mobiles will leverage expertise in marketing and sales to ensure its place in the top six.
Talking to PTI, Sculley said technology has now been “commoditised” and companies now need to focus on the brand and building customer loyalty.
“Technology is a commodity ... I grew up in commodity markets and I love that. There is little difference in what's there in a Coke bottle and a Pepsi bottle. It's all in the brand and the loyalty that you can build with the customer,” Sculley said.
He added that with commoditisation of technology, many players are coming in and trying to differentiate with different features.
The experience in consumer businesses that have commodity technology is that one ends up with six companies in the market, he added.
“Markets, even as big like India, can't really support more than half a dozen very successful companies,” Sculley said.
Sculley said that the market will see such a situation in about three years.
“I think this thing will sort itself out pretty fast. Fast meaning, three years something like that. It is not driven by us, it is driven by how things are happening.” he added.
When asked, if the handset market will see consolidation, Sculley said: “I don't think people will be buying people, necessarily. I think eventually you have to make money.
“Some companies will look at it and say, I've got beautiful products, but I can't figure out how to make money in India. Other companies will say I was just never able to achieve what I thought I could, so I'm dropping out. There will be people who will drop out.”
According to research firm IDC, India saw the highest rate of growth - over 186 percent - in smartphone sales in the Asia-Pacific region during January-March 2014, outshining countries like China.
In the first quarter of 2014, vendors in India shipped a total of 17.59 million smartphones compared to 6.14 million units in the same period of 2013. Smartphone sales in India are expected to reach 80.57 million units by the end of this year, IDC added.
While Samsung is the category leader with a 35 percent market share, Micromax had 15 percent, Karbonn 10 percent, Lava 6 percent and Nokia 4 percent in Q1, IDC said.
