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How many smartphone companies can survive in India? Maximum 6!

August 05, 2014 16:08 IST

How many smartphone companies can survive in India? Maximum 6!

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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, former CEO of tech giant Apple John Sculley said.

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.

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Image: Customers try out the new iPhone 3GS on the first day it is being sold at the Apple Store in Zurich.
Photographs: Christian Hartmann/Reuters

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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.

“Its all in the brand and the loyalty that you can build with the customer," Sculley said.

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Photographs: Reuters

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How many smartphone companies can survive in India? Maximum 6!

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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.

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Image: A man presents the new Samsung Galaxy device.
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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.

“Its not driven by us, its driven by how things are happening." he added.

 Asked, if the handset market will see consolidation, Sculley said: "I don't think people will be buying people, necessarily.

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Image: Actress Rituparna Sengupta holds her new Apple iPhone.
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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 per cent -- in smartphone sales in Asia Pacific region during January-March 2014, outshining countries like China.

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Image: Hostesses hold the the Huawei's new smartphone, the Ascend P7, launched by China's Huawei Technologies during a presentation in Paris, May 7, 2014.
Photographs: Philippe Wojazer/Reuters

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