Mobile Samir

MS Marketing (Session 2007-2009)

Telecom Industry – Mobile Handsets

Submitted To: Prof. Jagan Mohan

Submitted by:Samir Anand (0911)

HISTORYHISTORY Telephone history begins at the start of human Telephone history begins at the start of human

history. Man has always wanted to communicate history. Man has always wanted to communicate from afar. People have used smoke signals, mirrors, from afar. People have used smoke signals, mirrors, jungle drums, carrier pigeons and semaphores to jungle drums, carrier pigeons and semaphores to get a message from one point to another. But a get a message from one point to another. But a phone was something new. Some say Francis Bacon phone was something new. Some say Francis Bacon predicted the telephone in 1627, however, his book predicted the telephone in 1627, however, his book New Utopia only described a long speaking tube. A New Utopia only described a long speaking tube. A real telephone could not be invented until the real telephone could not be invented until the electrical age began. And even then it didn't seem electrical age began. And even then it didn't seem desirable. The electrical principles needed to build a desirable. The electrical principles needed to build a telephone were known in 1831 but it wasn't until telephone were known in 1831 but it wasn't until 1854 that Bourseul suggested transmitting speech 1854 that Bourseul suggested transmitting speech electrically. And it wasn't until 22 years later in electrically. And it wasn't until 22 years later in 1876 that the idea became a reality. But before 1876 that the idea became a reality. But before then, a telephone might have been impossible to then, a telephone might have been impossible to form in one's consciousness.form in one's consciousness.

Contd…Contd…"We picture inventors as heroes with the genius to recognize

and solve a society's problems. In reality, the greatest inventors have been tinkerers who loved tinkering for its own sake and who then had to figure out what, if anything, their

devices might be good for." Jared Diamond.

On March 10, 1876, in Boston, Massachusetts, Alexander Graham Bell invented the telephone. Thomas Watson

fashioned the device itself; a crude thing made of a wooden stand, a funnel, a cup of acid, and some copper wire. But

these simple parts and the equally simple first telephone call –

"Mr. Watson, come here, I want you!" With these historic words Alexender Graham Bell called to his

assistantThomas Augustus Watson over the so-called “Telephone”,and

“AN INDUSTRY WAS BORN”

Contd...Contd...

" . . . an inspired black-haired Scotsman of twenty eight, on the eve of marriage, vibrant and alive to new ideas." Alexander Graham Bell : The Life and Times of the Man Who Invented the Telephone :

Intrigue aside for now, the story of the telephone is the story of invention itself.

Bell’s original telephone which was invented on 9th October 1876 In cooperation with Thomas Watson.

HISTORY OF CELL HISTORY OF CELL PHONESPHONES

In 1973 Martin Copper came up with Motorola. In 1973 Martin Copper came up with Motorola. He took the project and let the people of New He took the project and let the people of New York see it. In 1977 the first cell phone was York see it. In 1977 the first cell phone was made in Chicago . When it first came out 2000 made in Chicago . When it first came out 2000 people was given a free trial. Then other places people was given a free trial. Then other places started to make cell phones. When to cell started to make cell phones. When to cell phone first came out they were huge. The phone first came out they were huge. The people did not know how to make the phone people did not know how to make the phone any more compact. In 1988 the big company's any more compact. In 1988 the big company's started to make cell phones. There were over started to make cell phones. There were over 54 places all over the world. 54 places all over the world.

Contd…Contd…

Cell Phone EvolutionCell Phone Evolution

TECHNOLOGYTECHNOLOGY In starting, the analogue system was followed for In starting, the analogue system was followed for

communication. But it had several shortcomings as communication. But it had several shortcomings as one of it is a serious lack of interoperability.one of it is a serious lack of interoperability.

Mobile telecommunication technologies have Mobile telecommunication technologies have developed in successive generations. The first developed in successive generations. The first generation (1G) appeared in the 1950’s. The second generation (1G) appeared in the 1950’s. The second generation (2G) or GSM technology is used massively, generation (2G) or GSM technology is used massively, but challenged globally by the next (third) generation but challenged globally by the next (third) generation (3G) technologies. This sequence of generations is (3G) technologies. This sequence of generations is characterized by increasing capacity (higher characterized by increasing capacity (higher transmission speeds) and richer content of the transmission speeds) and richer content of the message.message.

Contd…

In today’s ongoing time basically 2-In today’s ongoing time basically 2-types of technology is being used. types of technology is being used. These are 2G and 3G.These are 2G and 3G.

In 2G there are GSM and In 2G there are GSM and CDMA(2000-1X).CDMA(2000-1X).

And in 3G there are WCDMA and And in 3G there are WCDMA and CDMA(2000-1X-DO).CDMA(2000-1X-DO).

Wireless Access Mapping to Wireless Access Mapping to this Segmentationthis Segmentation

Voice-onlyVoice-only 2G (GSM, cdma2000 1X)2G (GSM, cdma2000 1X)

Messaging and limited data servicesMessaging and limited data services 2G (GSM, cdma2000 1X)2G (GSM, cdma2000 1X)

Advanced wirelessAdvanced wireless 2G (GSM, cdma2000 1X)2G (GSM, cdma2000 1X) 3G (WCDMA, cdma2000 1X-EV-DO)3G (WCDMA, cdma2000 1X-EV-DO)

High-end business/multimediaHigh-end business/multimedia 3G (WCDMA, cdma2000 1X-EV-DO)3G (WCDMA, cdma2000 1X-EV-DO) Complimentary access (WLAN a definite, maybe Complimentary access (WLAN a definite, maybe

WiMAX)WiMAX)

So Many Technology So Many Technology ChoicesChoices

WiBRO

2006 2007 2008 2009

3G+HSDPA

3.9G

2005

WiMAX (fixed)

3GPP2 systems (1X, EV-DO, nxDO, “Phase II” Evolution)

Flash-OFDM

3G+HSUPA

WiMAX (mobile)

802.20

WLAN Hotspots

1.

2.

3.

4.

5.

6.

OUTLOOKOUTLOOK

• Mobile devices are moving towards a dominant platform with broad consensuson supported features• Browsers are moving towards a “standards-based application container”• Local device features and capabilities are converting into services as well,simplifying access to local functionality• Mobile devices are becoming part of the global computing, data and servicesgrid as servers as well as clients

Industry OverviewIndustry OverviewGlobal Cell Phone MarketGlobal Cell Phone Market

Discussions (continued)Discussions (continued) How much would it cost? Approximately, $400.00.How much would it cost? Approximately, $400.00.

Gumstix Connex Gumstix Connex 200200

114.00114.00

GM-862GM-862 109.95109.95

AntennaAntenna 12.9512.95

LCDLCD 17.0017.00

KeypadKeypad 25.0025.00

Keypad EncoderKeypad Encoder 7.447.44

BuzzerBuzzer 2.642.64

MicrophoneMicrophone 3.003.00

SpeakerSpeaker 8.008.00

BatteryBattery 12.9512.95

Passive Passive componentscomponents

20.0020.00

Breakout BoardBreakout Board 50.0050.00

EnclosureEnclosure 10.0010.00

At the start of the decade, India was pretty much a telecom backwater. No more. Last year it actually grew at a faster rate than China for the first time in new mobile phone connections—and it is set to expand more than three times as fast as the mainland in 2007.

According to a new study by London-based research firm Wireless Intelligence. Last year, the number of mobile connections in India more than doubled to 142.2 million and that figure is expected to expand 48% to roughly 211 million by the end of 2007.

74% of FDI is allowed in INDIA which has attracted more foreign players to invest more and more.

INDUSTRY OVERVIEW IN INDIAINDUSTRY OVERVIEW IN INDIA

Karol Bagh market area of Delhi, India200 + small indoor shops, and 100+ outdoor market stalls

this one building, approx. 60+ small shops spread over 4 stories

wholesaling phone accessories and repair equipment

small workshops actively repairing phones, and offering training

Market TrendsMarket Trends

Today Mobile market is emerging at a Today Mobile market is emerging at a very fast and global pace.very fast and global pace.

Now a days Mobiles are used not only for Now a days Mobiles are used not only for communication but it has become a multi communication but it has become a multi utility device. E.g.... It is used for office utility device. E.g.... It is used for office use, entertainment use,etc.use, entertainment use,etc.

This industry has bring the world together This industry has bring the world together in one span.in one span.

Changing TrendsChanging Trends

Many people think cell phone is the best Many people think cell phone is the best thing since the sliced bread. Right?thing since the sliced bread. Right?

It is an excellent hacking and application It is an excellent hacking and application platform. However, we are not able to platform. However, we are not able to exploit its full potential.exploit its full potential.

Grameen PhoneOf course, Paris Hilton

Cyber Shepherd

Socio-economic trends

• Faster communications and information processingchange our ways to cooperate

• Towards better utilization of competences andresources in society at large

• From standalone business models to networked business organizations

• From products to services

• Faster feedback cycles

Services

Competences

Networks

Ecosystems

ENVIRONMENT Some of the external macro environmental factor which affects Some of the external macro environmental factor which affects

purchases of cell phones are:purchases of cell phones are: Demographics:-Demographics:- The changes in it affects the purchases of cell The changes in it affects the purchases of cell

phones on the basis of size, distribution, gender, educational phones on the basis of size, distribution, gender, educational level, standard of living, etc.level, standard of living, etc.

Political:-Political:- It includes domestic and international politics. As in It includes domestic and international politics. As in the case of cell phones our government has allowed 74% of FDI the case of cell phones our government has allowed 74% of FDI in telecom sector.in telecom sector.

Economic:-Economic:- This factor states that what is the economic strength This factor states that what is the economic strength of the customer and is he willing to buy the cell phone or not.of the customer and is he willing to buy the cell phone or not.

Socio-Cultural:-Socio-Cultural:- A consumer buys a cell phone on the basis that A consumer buys a cell phone on the basis that what he has got the feedback from his surrounding environment.what he has got the feedback from his surrounding environment.

Technology:-Technology:- Generally cell phones requires a good and better Generally cell phones requires a good and better technology so that the costs could be cut down. R&D is the best technology so that the costs could be cut down. R&D is the best method to determine the price, promotion, distribution of the method to determine the price, promotion, distribution of the handsets.handsets.

CONSUMER BUYING BEHAVIOR

Consumer buying behavior depends on Marketing Consumer buying behavior depends on Marketing Offer + Environment.Offer + Environment.

The 4P’s of cell phones are:-The 4P’s of cell phones are:-

Type of products (models) which are offered by the Type of products (models) which are offered by the company.company.

Price of the models of the handsets are according to Price of the models of the handsets are according to the features or configuration offered.the features or configuration offered.

Depends upon the place weather the type of cell Depends upon the place weather the type of cell phones suits the market or not.phones suits the market or not.

Today every company is promoting their products in Today every company is promoting their products in various ways. For E.g.. Promoting through various ways. For E.g.. Promoting through Advertisements on TV's & radios , Hoardings, Advertisements on TV's & radios , Hoardings, Newspapers, Internet, etc…Newspapers, Internet, etc…

Distribution channelDistribution channelIllustration

Advertising of new mobile phone models

Mobile phone catalogue

Advertising of new Nokia and other mobile phones

Phone subsidies by operators, in store

sales force

Promotion of state-of-the art Nokia equipment

Mobile phone catalogue

Only Nokia USA Support, games, cartoons, ring tones

Profile evaluator, phone comparison, product catalogue

Support, games, cartoons, ring tonesNokia.com

Nokia.xy(Country

websites)

Telecom operators

Club Nokia(Web site

per nation)

Nokia Concept

Stores

CHANNEL Awareness Evaluation Purchase After sales

Nokia Snowboard World cup, Beach

volleyball

Nokia Events

Personalized support, games,

ring tones, editors

Qualified Nokia sales personnel

In store sales of Nokia equipment

In store sales of Nokia and other

equipment

Promotion of state-of-the art Nokia equipment

Courses on the use of Nokia phone

features

Advertising of new mobile phone

technology & models

Advertising of new mobile phone

technology & models

Purchase of games, images,

ring tones

Support

Support, games, SMS, MMS, ring

tones

Nokia Academy

C U S T O M E R B U Y I N G C Y C L E

R A

N G

E

O F

C

H A

N N

E L

S

FACTORS AFFECTICNG FACTORS AFFECTICNG PURCHASING BEHAVIOR PURCHASING BEHAVIOR

Socio-culture factors affects the purchasing Socio-culture factors affects the purchasing behavior of consumers for cell phones. behavior of consumers for cell phones. Basically social class affects the purchases Basically social class affects the purchases decision of the consumers depending upon decision of the consumers depending upon occupation, income, high/middle/low class.occupation, income, high/middle/low class.

Groups also influences the buying decision. Groups also influences the buying decision. As cell phone purchase includes cognitive As cell phone purchase includes cognitive buying.buying.

Internal Stimuli:- A consumer analyzes that Internal Stimuli:- A consumer analyzes that what is the basic need for a cell phone.what is the basic need for a cell phone.

External Stimuli:- People purchases cell External Stimuli:- People purchases cell phones just to satisfy themselves as it gives phones just to satisfy themselves as it gives a standard and status in the society.a standard and status in the society.

Contd...Contd...

Age & life-cycle of cell phones:-Age & life-cycle of cell phones:-

Basically cell phone companies target on Basically cell phone companies target on

Youth (students)Youth (students)

Middle aged (working & business class)Middle aged (working & business class)

Old aged consumers.Old aged consumers.

In accordance with their incomes and In accordance with their incomes and standards.standards.

Consumers follow Cognitive and up to some Consumers follow Cognitive and up to some extents Impulsive buying (convenience due extents Impulsive buying (convenience due to plastic money).to plastic money).

Contd…Contd…an E.g.an E.g.

Mere paas gaadi hai, bangla hai, daulat Mere paas gaadi hai, bangla hai, daulat hai... tumhare paas kya hai?hai... tumhare paas kya hai?

Mere paas latest mobile hai.Mere paas latest mobile hai. You know the You know the type. Youngest kid in the office, but the guy with type. Youngest kid in the office, but the guy with the coolest cell phone. And not necessarily the coolest cell phone. And not necessarily funded by Daddy Big Bucks. “I blew my entire funded by Daddy Big Bucks. “I blew my entire salary on this phone” is an increasingly common salary on this phone” is an increasingly common story. Yet, there is no permanent purchase story. Yet, there is no permanent purchase satisfaction. The owner of a Nokia N70 is already satisfaction. The owner of a Nokia N70 is already eyeing an N91 eyeing an N91

Sharme (LifePod)Mobile device – Recording everything

What we say

What I hear

What I feel etc.

Where I amWhat I write

What I see

USES AND NEED FOR MOBILE PHONESUSES AND NEED FOR MOBILE PHONES

After making a decision of After making a decision of purchasing a cell phone a consumer purchasing a cell phone a consumer also focuses on also focuses on

POST PURCHASE EVALUATON.POST PURCHASE EVALUATON.

As the cell phones are electronic As the cell phones are electronic gadgets it requires maintenance.gadgets it requires maintenance.

It requires Installation of softwares It requires Installation of softwares also because of a numerous features also because of a numerous features available in the market.available in the market.

A proper servicing is also required.A proper servicing is also required.

minimal street customer care minimal street customer care center = flat surface + center = flat surface +

screwdriver + new component screwdriver + new component + knowledge+ knowledge

Features or characteristic present Features or characteristic present in cell phonesin cell phones

Apart from receiving and making calls and Sms following Apart from receiving and making calls and Sms following features are available.features are available.

CameraCamera Video RecordingVideo Recording BluetoothBluetooth InfraredInfrared Mp3Mp3 RadioRadio Video ConferencingVideo Conferencing Windows (in some ranges)Windows (in some ranges)

SEGMENTATIONSEGMENTATION

Cell phone companies have segmented Cell phone companies have segmented their ranges in 3 groups:their ranges in 3 groups:

Low-End consumer groups ( cell phone Low-End consumer groups ( cell phone models pricing between Rs 2000 – 6000)models pricing between Rs 2000 – 6000)

Middle-End consumer groups (cell phone Middle-End consumer groups (cell phone models pricing between Rs 7000 – 15000)models pricing between Rs 7000 – 15000)

High-End consumer groups (cell phone High-End consumer groups (cell phone models pricing between Rs 16000 – models pricing between Rs 16000 – 35000)35000)

Enterprise/High-end Device Enterprise/High-end Device CategorizationCategorization

VoiceVoice

Advanced Advanced Wireless Wireless

Services (e.g. E-Services (e.g. E-mail)mail)

Messaging and Messaging and Limited Limited Wireless Wireless ServicesServices

High-End High-End BusinessBusiness

End-User NeedsEnd-User Needs Mobile DeviceMobile Device

CommunicatorCommunicatorss

Voice-Voice-centric centric devicesdevices

Smartphones Smartphones &&

messaging messaging devicesdevices

Does this kind of categorization workFor South Asia?

TARGETINGTARGETING

Basically, cell phones today has become a fashion and Basically, cell phones today has become a fashion and standard standard

Of social status for everyone. Its no more only a device Of social status for everyone. Its no more only a device of communication but it has become a source of of communication but it has become a source of entertainment and work.entertainment and work.

So the cell phone companies are targeting on almost So the cell phone companies are targeting on almost every class of consumers and in its minimal cost it is every class of consumers and in its minimal cost it is trying to give the best features.trying to give the best features.

But the main emphasis is given on the middle class of But the main emphasis is given on the middle class of consumers as INDIAN market is a middle class consumers as INDIAN market is a middle class market. (This statement has been given by the CEO of market. (This statement has been given by the CEO of NOKIA-INDIA)NOKIA-INDIA)

And the next comes youngsters (aged between 21 – 30)And the next comes youngsters (aged between 21 – 30)

POSITIONINGPOSITIONING Here in this stage companies like Nokia, Here in this stage companies like Nokia,

SonyEricssion, Motorola, Samsung are trying toSonyEricssion, Motorola, Samsung are trying to Position there product in the eyes of Position there product in the eyes of

consumers.consumers. They are trying to build up an image while They are trying to build up an image while

getting their advertisements done by getting their advertisements done by recognized faces like film stars. For E.g.. For recognized faces like film stars. For E.g.. For Motorola-Abhishek bachhan, Sony Ericssion-Motorola-Abhishek bachhan, Sony Ericssion-Hritick Roshan, Samsung-John Ibraham.Hritick Roshan, Samsung-John Ibraham.

The companies are offering a variety of models The companies are offering a variety of models available in all ranges (as per the concept of available in all ranges (as per the concept of product differentiation)product differentiation)

COMPETITIONCOMPETITION

Today every product is facing Today every product is facing competition with each other and with competition with each other and with the products of other types also.the products of other types also.

There are 4 types of competition There are 4 types of competition faced by any company.faced by any company.

GenericGeneric FormForm IndustryIndustry BrandBrand

COMPETITIVE ANALYSISCOMPETITIVE ANALYSISCompetitive analysis

competitorscompetitors

Substituteproducts(services)

Substituteproducts(services)

Customers(channels)

Customers(channels)

Newentrants

Newentrants

SuppliersSuppliers

Bargaining power Bargaining power

threats

threats

Rivalries among the

Barriers to entries

[Porter, 2001]

Competitive

forces

COMPETITIVE COMPETITIVE POSITIONSPOSITIONS

MARKET LEADER – NOKIAMARKET LEADER – NOKIA MARKET CHALLENGER – MARKET CHALLENGER –

SAMSUNG, MOTOROLA.SAMSUNG, MOTOROLA. MARKET FOLLOWER – SONY MARKET FOLLOWER – SONY

ERICSSION, LG.ERICSSION, LG. MARKET NICHER – APPLE’S I-MARKET NICHER – APPLE’S I-

PHONES.PHONES. NEW PLAYERS – FLY, BIRD.NEW PLAYERS – FLY, BIRD.

COMPETITIVE COMPETITIVE STRATEGIESSTRATEGIES

As Nokia is the market leader in the cell phones market it has one As Nokia is the market leader in the cell phones market it has one basic strategy it attacks on the Telecom sector of the country which basic strategy it attacks on the Telecom sector of the country which are still in its developing stage instead of being indulged in already are still in its developing stage instead of being indulged in already developed country.developed country.

Nokia and Sony Ericssion have adapted Growth Strategy, Offensive Nokia and Sony Ericssion have adapted Growth Strategy, Offensive strategy (specially Guerilla). strategy (specially Guerilla).

Motorola being the challenger for Nokia is playing Defensive.Motorola being the challenger for Nokia is playing Defensive. In CDMA section the market leader is Samsung (adapted Growth In CDMA section the market leader is Samsung (adapted Growth

Strategy, offensive) and LG (adapted Growth Strategy and Defensive) Strategy, offensive) and LG (adapted Growth Strategy and Defensive) is the largest challenger.is the largest challenger.

Followers are Panasonic, Benq-Siemens, Mithubhishi, etc (these have Followers are Panasonic, Benq-Siemens, Mithubhishi, etc (these have adopted Defensive strategy).adopted Defensive strategy).

Followers in the CDMA section is ZTE-Classic (It has adopted Growth Followers in the CDMA section is ZTE-Classic (It has adopted Growth Strategy and is been into Guerilla war)—E.g.:-RELIANCE , Spice, etc.Strategy and is been into Guerilla war)—E.g.:-RELIANCE , Spice, etc.

Companies like Apple, I-Mate, Virtue are market nichers in INDIA and Companies like Apple, I-Mate, Virtue are market nichers in INDIA and are playing safe.are playing safe.

DOMINENT PRESENCEDOMINENT PRESENCEGSM handset market share in India(%)

Nokia70%

SonyEricssion8%

Motorola15%

Others7%