"Have Breakfast… or…Be Breakfast!"

"Have Breakfast… or…Be Breakfast!" - By Y. L. R. MOORTHI

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 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 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" (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 (Salman Khan, Aamir 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.