Tata Nano 800cc variant Coming soon: Will it succeed in the Entry-level car segment?

Business daily ET reported yesterday that Tata Nano is all set to resurrect its image from an ultra-low cost ‘People’s Car’ to a more powerful variant with an 800cc 3-cylinder engine to tap the entry-level segment in the four-wheeler car market.

This decision by Tatas to revolutionize the petit car comes with a number of caveats, and to allay down-market brand image of the vehicle in the light of various technical snags, including Nano going on fire on mid-roads, causing fear among the ultra-cheap car users.

Logically, the 800cc Nano is likely to increase the appeal of the small car with its more powerful engine and better pick-up to ride on the Indian roads, as compared to its current 624cc engine variant, which is one of the lowest by industry standards.

However, the powerful engine module would drive up costs for the Nano – leading to shift in its USP of being a cheap car to being pitted in competitive entry-level car segment, already crowded by the likes of Maruti Alto, Hyundai Eon and Chevrolet Spark. Most of these entry-level vehicles sport a tag of Rs.2.5 lakh at ex-showroom Delhi prices, and even Nano’s 800cc variant is likely to follow the suit.

[Image source]

In my opinion, Tatas does not have any hot-selling car in the entry-level segment. They have a sensational brand in the form of ‘Indica’, but that falls above the entry-level segment, which can be termed as mid-level hatchback segment.

While, on the one hand, Tatas can boast of product-wise monopoly in the ultra-low cost car segment – with no other automobile maker present in the segment as yet; there has been a vacuum in the entry-level car segment for the Tatas since a long time now.

For long, Maruti has led the entry-level segment with its best-selling Maruti 800 model – which is now in a gradual phase-out mode; and continues its strong hold on the segment with its 800cc Alto and 1000cc-engine upgraded Alto K10 model.

However, what concerns me is why someone would buy an 800cc Nano when so many tried and tested four-wheeler alternatives are available in the entry-level segment. Probably, a Nano will always be a Nano with the accompanying imagery of a poor man’s car.

Rather, Tatas could have re-modeled a newly branded car in the 800cc engine, looking at the broad technical support and know-how that the company boasts of in the automobile sector.

Moreover, Tatas have already pushed the sales of its new Tata Nano 2012 model – tweaked with new design for seats and headrests, all-beige interior theme, rear-view mirrors on both sides, four new attractive shades and a more powerful ride with 37 bhp of power and 51 nm of torque.

In addition, with Nano being originally envisaged as a low-cost car, the management could have further driven its cause by turning the wheels of Nano to hybrid fuel technology alternatives, including a turning it into an low-cost electric vehicle, amidst screaming fuel prices.

Exploring HTC’s performance in India’s Smartphone Market

HTC has been pioneers in the smartphone industry for over a decade now, bringing in the first touch screen smartphone, the first 3G capable phone, the world’s first android smartphone (HTC Dream) in 2008 and the first Windows Phone( HTC Mozart) in 2010. HTC has always remained a slightly weak competitor compared to the Apple and Nokia mobiles . Even in the last year, while the smartphone market has turned topsy turvy, HTC has remained more or less the runt of the group. This post explores the plight of HTC despite being Innovators in the market and also what it could do different.

The plight of HTC

2011 saw the rise of Samsung to become the flag bearers of Android and the Windows phone with the Galaxy and Omnia range respectively. Samsung usurped HTC in market share in both Windows and Android based smartphone segment by end of 2011. Given below is a snap shot of the plight of HTC in the year 2010-11 in which HTC moved from 8.5% to 6.5%.

The first half of 2011 saw a revival for HTC with the launch of its popular HTC Wildfire and the HTC Sensation, but Samsung’s Galaxy S and S2 ripped HTC’s loyalist away to pull itself to the top.

HTC’s Journey in 2011

HTC started the year with a bang in India, with the launch of the HTC Wildfire and HTC Desire HD.

HTC Wildfire sported a compact and sleek body with a 3.2” capacitive touchscreen. The phone ran on the Android 2.1 éclair( yes this is how fast Android grows) and a 0.5 GHz processor. The phone had a 5 MP camera that was one of its big selling points. Priced then at 16,500 the phone was one of the best deals for the mid-range smartphone segment. This was of course before Samsung revolutionized the mid-range smartphone segment with the Galaxy range.

HTC Desire HD is a mammoth among smartphones. With a massive 4.3” capacitive touchscreen display, an 8 MP camera and the latest Android software ( 2.2 froyo) the phone had everything going for it. That is except for a slightly less impressive display ( Retina display and Super AMOLED are a visual delight) and a slightly weaker battery than the Samsung Galaxy S and heavier built. Samsung Galaxy S2 came in mid 2011 to wipe out HTC Desire HD from the memories of Android fans.

Samsung had strong response to both the above mentioned models which left the HTC fans a little less thrilled. HTC loyalists could only hope for better results with HTC’s fight back with promising models such as HTC Explorer and HTC Sensation towards the last half of 2011.

HTC Explorer and HTC Sensation

HTC Explorer came to the Indian shores in the last quarter of 2011 and already it’s raising a lot of eyebrows. HTC Explorer is a solid phone for the entry level smartphone category. The phone sports a 3.2” capacitive touchscreen with a sleek metallic body. The phone runs on the Android 2.3 gingerbread operating system powered by a 600MHz processor with a 512 MB RAM. It is the most heavily promoted smartphone from HTC with Interesting Ad campaigns and a different approach in marketing. HTC Explorer is priced at Rs 9799 and is a great bargain for someone who wants the perfect smartphone experience at sub Rs 10000 price. Despite being priced higher than the Samsung Galaxy Fit, HTC Explorer is doing quite well in the market.

HTC Sensation is one of the premium offerings from HTC. The phone sports a massive 4.3” Super LCD touchscreen. HTC clearly loves big things and this phone is big on all features. The phone runs on Android 2.3 Gingerbread OS powered by a 1.2 GHz dual core processor with a 768 MB RAM and 1 GB internal storage. Priced higher than the Samsung Galaxy S2, HTC has aimed to make the phone premium looking with a metallic cover that shows the phone means business. The phone comes with a mean 8MP camera and the beautiful HTC Sense V 3 UI. The HTC Sense UI is arguably the best customized android based UI among all smartphones. Priced at Rs 28,451, it is one HTC’s best attempts at laying siege to the ever aggressive Samsung. It remains one of the most popular premium end smartphones from HTC.

Samsung S2 however has outdone the HTC Sensation to provide better features for the same price. HTC, despite so many incredible models seem often outdone by Samsung in price and value for money terms. The phones have seemingly fallen short of expectations for most people despite HTC’s innovative offerings. Samsung have taken Android phone market by storm making Galaxy range almost synonymous with Android. It is this brand recall that has been missing for HTC.

The Road forward

With the launch of HTC Titan 2, HTC would now be looking forward to change its so far lackluster performance in the smartphone market. While innovation and being first have served HTC well in the past. It seems with increasing competition with multiple competitors in multiple Operating systems, HTC maybe spreading itself too thing. HTC Titan 2 is a promising phone, a massive screen, the fastest processor and a 16 MP camera that we can’t even put adjectives to ( mammoth feels too small a word) , the phone has everything going for it. Whether, HTC would have enough time building up a sizable market share before the Korean giants come swooping in is debatable.

The company must understand now that innovation isn’t enough to sell products, aggressive marketing and building consumer centric products is the only way HTC can be saved from oblivion.

Summary

HTC has been, is and will remain one of the most innovative companies in the smartphone segment. They have the constant urge to delight the world with great alternatives to the Apple iPhone. Increasing competition and shifting market trends have however hit HTC hard.

The company must now regroup and understand that innovation isn’t the only thing people need. Titan 2 and the promotion of HTC Explorer in Indian markets might just turn the tide for HTC. We are sure the great innovators will have some new trick up their sleeve.

What is your take on HTC’s performance in India?

News Digest: Mobile Handset Growth, Trade Deficit, Forbes 50 Indian Women & more…

Last week of February has been sedate to say the least – In the world of finance, MCX IPO was star performer, with the issue being over-subscribed by almost 55 times on investor frenzy over the sole listing of the commodity exchange. The allotment is expected around 5/6^th of March; whereas listing by the end of the week.

Among other news, the state-owned energy giant ONGC’s auction almost fizzled out, thanks to reports of last minute bail-out by the insurance behemoth LIC; which was disgracefully dubbed as ‘success’ by the face-saving government. Here are few highlights of the last few days:

Shut your Mobile while Driving

The latest news that has hit headlines in today’s morning newspapers is jail term and higher fine for traffic law offenders, including drunken driving, jumping traffic signals and use of mobile phones behind the wheels.

The Union Cabinet has approved amendment of the Motor Vehicles Act to increase penalties manifold to as much as Rs.500 for talking on mobile phone while driving (including hands-free instruments), and subsequent violations up to Rs.5000.

Indian Mobile market grew 10% in 2011

The growth in subscriber additions in the telecom sector is having a positive rub-off effect on Indian handset market as well, with the sales registering 10% YoY growth at 183 million units in 2011. Moreover, Nokia retained its top spot by retaining almost one-third market share in terms of unit shipments.

Interestingly, the shipments for multi-SIM handsets grew 61% YoY, constituting more than half (57%) of the total Indian mobile handset market.

Forbes List of Asia’s 50 Power Business Women

International Women’s Day is annually held on March 8 to celebrate women’s achievements across the world, from the fields as varied as politics, business, education, etc.

Just prior to this crucial event, Forbes has released its list of Asia’s 50 power business women, mainly crowded by Indians, Chinese and Taiwanese people. Following are the 8 Indian women who made a cut into the elite list:

• Vinita Bali – Britannia Industries
• Shobhana Bhartia – HT Media
• Ekta Kapoor – Balaji Telefilms
• Chanda Kochhar – ICICI Bank
• Kiran Mazumdar-Shaw – Biocon
• Zia Mody – AZB & Partners
• Shikha Sharma – Axis Bank
• Mallika Srinivasan – Tractors & Farm Equipment

India’s Trade Deficit for January 2012 at $14.7 bn

India’s January exports came in at $25.35 billion, up 10.10% year on year – taking the cumulative exports for the 10 month period of the fiscal year 2012 to $242.80 billion.

The value of imports in the country surged by 20.30% YoY to arrive at $40.10 billion; marred by higher crude oil import bill. To sum it up, India’s trade deficit for January got screwed at $14.70 billion vs. $10.30 billion logged during January 2011. Trade deficit during the fiscal stood at $148.60 billion as against $105.90 billion YoY.

Sunil Mittal hints at tariff hike if charged for spectrum

Yesterday, we briefed on how mobile media usage has surpassed TV in consumer time spent. InMobi’s Mobile Media Consumption report states that consumers spend 27% of their media time on mobile, compared to 22% on television.

With the apex court canceling 122 licenses of new telecom operators in the 2G spectrum allocation case, telecom czar Sunil Mittal has raised alarm bells saying that mobile tariffs will have to be raised if incumbent operators like Bharti are made to pay extra for the spectrum that has been allocated to them.

4G Auction by year end – Govt’s Rs. 78000 crore bounty

First the 2G, then 3G and now its time for another high octane drama of 4G spectrum Auction. The 2G spectrum was sold very cheaply (and now licenses getting scrapped). 3G auction was bumper which raked in 70k crore rupees for Indian government. Now, its time for 4G auctions – and this one is expected to be even bigger!

Telecom Minister Mr. Kapil Sibal made a statement at Mobile World Congress function stating

“By the end of the year, we are actually going to auction 4G (spectrum). That is what our intent is. We have enough spectrum now to share with everybody,”

Like 3G auctions, 4G auctions are expected to give the center a much needed fiscal boost with all 6 blocks of available 4G spectrum going under the hammer. It is expected to fetch as much as 78000 crore rupees if all 6 blocks are sold and 58000 crore if 4 of them are sold!

With 122 2G spectrum licenses issued in 2008 being scrapped by Supreme Court, the re-auction process is expected to take not less than 400 days as per TRAI officials. The 2g spectrum re-auction is also expected to bring in handsome gains to the center, though probably not in this fiscal. The question mark remains as to what will operators do from the time 2G spectrum is actually cancelled and the re-auction takes place.

Although, telecom sector has been in continuous limelight for past 5 years, next 12 to 18 months are expected to be very interesting. Given the circumstances, some Operators may quit, some may merge, while others may come out winners. This is going to be time for telecom sector consolidation in India.

3G services have still not matured in India and Indian telecom consumers have not taking fancy to it. Given this scenario, it is possible that 4G auction may actually be a dud. Telecom Operators will be shy of spending big bucks on yet another spectrum. Instead, operators may stick to offering tried and tested 2G & 3G services, where they will not have to spend for upgrade their infrastructure.

Telecom Drama is not over – It is just getting started!

Mobile Media usage surpasses TV in consumer time spent [Infographic]

The mobile media consumption has grown to a proportion where now it has surpassed the amount of time spent by consumers watching TV. InMobi’s first Mobile Media Consumption report states that consumers spend 27% of their media time on mobile, compared to 22% on TV.

One of the key findings of the report is the growth of M-Commerce (E-commerce on Mobile). Mobile devices are increasingly becoming the medium for consumers to make purchases or carry out financial transactions. The report finds that Three quarters (76%) of mobile consumers plan to conduct mCommerce activities within the next year.

Even Mobile advertising is now becoming mainstream with 42% users claiming that they have found some new through this medium and over 66% of mobile users are just as comfortable with mobile advertising as they are with TV or online advertising.

InMobi Mobile Media Consumption Infographic

Other Highlights

• 39% of consumers use their mobile phones while watching TV.
• 42% of mobile consumers claim mobile advertising has introduced them to something new.
• Advertising on mobile devices has led to mobile gaining tremendous popularity as a viable shopping channel, with
• 23% of respondents indicating that mobile ads saves time and money
• 14% of respondents indicating that mobile ads have influenced them to buy via mobile

I have question to readers – Do you really think mobile advertising is becoming so mainstream? I find them far more intrusive than online or TV advertising (due to small screen sizes of mobile). What do you think?

Acrossworld launches low cost tablet for students [yet another?]

Its raining cheap tablets in India - In last couple of weeks alone I have heard of about 5 new tablets launched all under USD 100 price range.

Acrossworld, a Bangalore / Boston based company providing SAAS services to schools and colleges have now announced launch of its low-cost tablet PC for Rs. 5000/-. The tablet called ATab has been launched in association with Delhi-based Go-Tech.

According to the press release, tablet will come with a 7” TFT touchscreen, 1.1 GHz processor,    512MB RAM, 2GB internal memory with option of expanding it to 16 GB. It has an USB external dongle support.

The cost of Rs. 5000 includes 3 year unlimited access to AcrossWorld’s Education Technology Platform – EducationBridge^TM that allows allows academic institutions, teachers and students to use a variety of content elements including Open Content, Open Educational Resources, Legacy Content and proprietary content sources.

ATab will be available in several color options that are expected to appeal to the younger generation.

The cheap tablet market is already getting quite saturated – Already numerous companies have joined the fray for low cost tablet distribution, which includes MHRD’s Aakash as well as BSNL’s recently launched tablet. Most of the companies have made announcements about these tablets, but hardly anyone has delivered as yet.

Majority of these low cost tablets (except Aakash) are essentially Chinese hardware re-branded and sold. Only time will tell how useful these tablets are going to be especially in the field of education.

Internet influences Indians more than friends & families

In today’s world, internet is increasingly playing an important role in our daily lives. From someone who is aged 7 years to someone who is 70 years, internet offers them wealth of information & advice on travel, leisure, personal finance, buying electronic items & many such things.

Internet has now become so ubiquitous to millions of Indians, that it now influences them more compared to their friends & families. This is the finding of Digital Influence Index survey conducted by market research firm Fleishman-Hillard & Harris Interactive.

Compared to their global peers, Indians & Chinese are the ones who are most influenced by internet. In India, 79% of them said that internet influences them more than family & friends. The report says that the anonymity of the Internet holds greater sway with consumers in influencing purchasing and other decisions – greater even than the opinions of family, friends and co-workers.

Global Digital Influence Index

The third edition of Digital Influence Index studies consumers from 8 countries – Canada, China, France, Germany, Japan, United Kingdom and United States – to see what consumers are doing online but also whom they’re interacting with, the transactions they’re completing, technologies they’re using to navigate the Web and the collective growing influence of the Internet on
consumer behavior.

Its just not about discounts when “liking” brands

It is a popular belief that consumers follow Businesses & Brands primarily to get know offers and discounts. However, the report points that it is not the primary reason why consumers follow brands. They are genuinely interested in know more about the brand. 79 percent of respondents from China, Germany and India follow brands on social media because they want to learn more about the brand, product or service offered.

Consumers confidence in bloggers remains low

Now this is something that may not be happy news for bloggers (including yours truly). The report says that globaly only 26 percent consumers indicated that they trusted the advice and opinions found in blogs. Additionally, 86 percent of consumers question the truthfulness of a
post written by a blogger who has received a free sample in exchange for writing a review.

Although consumers continue to rely heavily on the Internet to inform purchasing decisions, bloggers are struggling to achieve the credibility of other online sources.

The silver lining though is that in China (40%) & India (36%) consumers showed highest trust in blog opinions.

Check out the entire  Digital Influence Index whitepaper here.