Apple's misery in the emerging markets !!

Apple, the world's most innovative company, is touted as one of the most respectable firm America has ever produced. Without a doubt, Apple's products are revolutionary and always take us into a new era marked by greater sophistication. They create ripples in the markets much before their launch and the tsunami arrives the day they are in the market. Be it iPod, iPhone or the recent iPad, people have tortured their legs standing in ever-lasting queues, to get their hands on the "iProducts". But as much as Apple has succeeded in American and European markets, it has failed miserably in the emerging markets. Apple has failed to sell iMac, iPad and more so iPhone in the emerging markets like India and China. Looking at the potential these two markets possess, any CEO in the world would dream to conquer them. China is numero uno with 634 million mobile users, India is second with 427.3 million. Now that combined is fcuking 1 billion "can-be" customers. Shouldn't Steve Jobs pay attention to these markets which they respectfully deserve? Isn't it a job of Jobs, to multiply the money of his company's investors in whatever way possible?

There are many reasons as to why Apple has failed to make it's mark in these tremendously growing market. The first and the obvious reason is the cost of its products. They are humongously expensive in these countries when compared to the US. iPhone 3G(8Gb) costs around 4 times the cost as available in the US markets. And as a matter of fact, people in India and China are still not rich (despite bragging about 10% growth rate) and understandably would not like to pay such an amount of money when they can buy a bike instead. Moreover, as a part of their cheaper habits, Chinese and Indians prefer to buy Apple's products from US, either when they visit the country themselves or ask their visiting friends to purchase for them leaving their own country's market dry and hapless.

Secondly, there is a lack of aggressive marketing strategy. For no obvious reasons, the company has not shown any inclination towards making its products people's first choice in the emerging countries though they are "competition killer" in nature as they have shown in the American markets. There are no ad campaigns, no massive publicity when their competitors Nokia and Samsung are flooding the markets with the news of their new products and innovations. Apple still remains a company for elite in these countries.

Thirdly, iPhone comes bundled in with a service provider. Recently, there has been a boom in the number of service providers particularly in India which has made mobile usage as cheap as a postcard. Further, these service providers have various cellular plans which are designed to suit various kinds of users. Thus, this binding of service provider with the iPhone restricts the users to avail the services of their choice and advantage.

Fourthly, India and China do not walk hand-in-hand with US when it comes to telecommunications technology. While 3G services were introduced in the American and European markets much before 2005, they are still to be launched comprehensively in India and China. This lag in technological advancement make new Apple products which are designed keeping the latest US technology in mind less attractive in the "still developing" economies.

And last but definitely not the least, tough competition from key players in the cellular markets like Nokia and Samsung, who really understand the needs of the customers in these areas and have built their products to suit them. These companies have also invested heavily in massive campaigning, covering all the segments of the society. The competition has just grown stronger with the entry of new players. And Apple will now find it all the more difficult to sell its brand in China and India unless the governments of these countries decide to cut the duties on imported electronics items sharply.

Apple is still not the "Apple" in the emerging world. Apple might be the "God" of the American and European people but it should not overlook the other half of the globe. Purely in business terms, these market could be heaven for any technology company. American and European economies are on the verge of stagnation or rather decline, thus to keep up with the pace of growth Apple has achieved in the last decade they need to focus more on the countries like India and China providing people in these countries with what they want at a fair price. Apple knows well the power of its killer products, they are better than any of their contemporaries and should use it to their advantage rather than being gratified by their tremendous American and European sales figures.

If not now, then when?

Yes, that's the question boggling the mind of many environmentalists and researchers who understand exactly what's up with mother nature. We never faced a threat more severe than what we are up against now, "Global Warming". It is not only some social or economical threat rather it threatens the very "existence" of human survival on Earth. Isn't that grave enough?? Looking at the actions taken by our administrators, to mitigate this threat, it doesn't seem so. They are busy playing blame games against each other. India, China and other developing countries say US and European countries are responsible for Climate Change, hence they must take the responsibility of cutting down the carbon emissions (root cause of Global Warming). US and European countries on the other hand, hold the recent high growth in demand of fossil fuels in the developing nations responsible for the surge in Global Warming and wants them to cut down their use of carbon emitting substances drastically.

The average temperature of the globe has augmented more than 1 degree Fahrenheit since 1900 and the speed of warming has been almost three folds the century long average since 1970. All studies suggest that human actions, mainly discharge of green house gases from manufacturing units, vehicles and burning forests, are perhaps the leading factors contributing to global warming. Without action to reduce these emissions, the global average temperature is likely to rise a further 1.8-4.0 degree Celsius this century and by up to 6.4 degree Celsius in the worst case scenario, the IPCC projects. Even the lower end of this range would take the temperature to a threshold beyond which many scientists believe irreversible and possibly catastrophic changes would become more likely.

So the big question is, What steps are being taken by our administrators to avoid this catastrophe? And if we make an effort to find an answer, we'll see many promises being made by the Obamas and the Jintaos and the Sarkozys but nothing concrete has been achieved yet. Kyoto protocol, which is considered to be the first most comprehensive step towards arresting the quantity of green house gases emitted in the atmosphere, is a miserable failure. First of all, having an emission reduction treaty without USA cannot succeed. It is not only bias for developing nation who have just learnt the meaning of growth but also envious for developed European nation. They can't compromise their growth to control global warming when the biggest polluter in the world, cares least about it. Secondly, there are differences in the treaty regarding the levels of emission cut by individual nations. Some developing countries are allowed to pollute more. Moreover, on the technical front, scientists and researchers argue that the protocol was misconceived from the start because it was based on previous international treaties to protect the ozone layer, to stop acid rain and to control the proliferation of nuclear weapons. This borrowing simply failed to accommodate the complexity of the "climate-change" issue.

Then the whole world watched what happened at the Copenhagen Summit in December, 2009. The Copenhagen accord was drafted by the US, India, China, Brazil and South Africa. It was sought as a successful agreement by the Obama administration, but all the nations didn't take it likewise. It wasn't adopted in the debate of all participating countries. The document does not force nations to make any legally binding commitments for reducing carbon dioxide emissions, it leaves the decision on the social welfare will of the nations.

Is this our approach towards fighting this issue? Is this what we expect from our administrators? Aren't they aware of the rising number of instances of floods, storms and other natural calamities? I am a big Obama fan, but disappointingly, he has failed to deliver on this front, though this was one of his most promised agenda. The world, specifically our leaders need to wake up and address this issue with utmost priority and diligence before it's too late. Environmentalists should have a greater say and authority in policy making, because they know exactly what needs to be done. Agreements and deadline on Climate Change should be strictly met, in fact a severe penalty should be levied on the countries not meeting the proposed carbon cuts. A sense of "peer pressure" be built among economically similar nations to impose the reduction in emissions. And most importantly, people need to be taught and made aware of the ill-effects of carbon dioxide emission in to our atmosphere. A concerted effort is needed to arrest and control global warming. Be it the underdeveloped Africa or the developing Asia or the developed America and Europe, all need to come forward to fight for "human existence".

Read the previous article here Microfinance .

Bangalore, Boston and Beijing !!

This article is inspired by the readings from Thomas Friedman's "The World is Flat" where he discusses how over time, especially in the last decade the world has become a "level playing field". Specifically during the IT bubble era, massive investments were made to connect the whole world through broadband and undersea optic cables. Computers became cheaper and widespread, and there was advent of e-mail, IM clients which made communications amongst people in various parts of the world cheaper and convenient. Availability of information was made easier by search engines like Google and Yahoo!. Propriety softwares were engineered which could divide the work into logical pieces and distribute one part to Bangalore, one part to Boston and one part to Beijing where they would be developed simultaneously to be later assembled as a complete product.

There are uncountable benefits of such kind of a product development process. It not only makes the production cost come down but also adds a new dimension to the product. Production cost is reduced significantly as the parts of the job are assigned to the places where they can be done at the lowest cost. Moreover, people from various cultures, where the needs vary can add new dimensions to the product in order to make it globally usable, thereby increasing the market size for the product. Tens of thousands people at more than 30 companies on 3 continents worked together to make Apple's first iPhone possible. All in all, people with best possible skills come together to develop a product. But how do consumers benefit from this process?. Simple, they get high quality products at competitive prices.

There is no doubt that America is one nation driving this change in product development process. Be it Google or Yahoo! or Microsoft or Amazon, all are the creations of American nationals. It is due to the research going on in American universities that we have such high speed internet connectivity and companies can now do round table video conferences with their colleagues in other countries, discuss the prototype along with planning and distribution of tasks. But has USA really gained from it, from a long term perspective? Recently, there has been a lot of hue and cry over jobs being send overseas. People of America are for sure facing tough competition from their counterparts in Bangalore and Beijing. But that is the strength of our character; we are always at our best when challenged. Instead of wasting our time on putting up rallies on this issue, we should accept the fact and face it with wit and vigour. We should learn lessons of hard work from Indians and Chinese. And always remember one thing, be it good or bad, the time always changes for "Nothing but only change is permanent"

The Great American Dilemma !!

Ever since the recession started with the break-out of Lehman Brothers in September 2008, Chinese have been teasing the superpower in one way or the other. USA doomed by it's financial instability has been caught off guard by the Chinese, who are leaving no stone unturned to harass the Americans. Chinese has been manipulating their currency right since the beginning, but it is only now that it is causing tremors in the American and European economies. They have deliberately regulated their currency to keep it at a lower level in order to boost it's exports. As a result of which the demand for cheap Chinese products have increased astronomically, and that of the costlier domestic goods has declined drastically. Dead are many american manufacturing industries because of this. Europe is also reeling under pressure created due to excessive demand for Chinese exports which are much much cheaper than their own. This has in turn raised the unemployment level to an all time high.

On one hand US government is criticized for adopting protectionist policy and at the same time, this ploy by the Chinese is their game plan to overtake the US economy. One would say that lowering of prices is good for the consumers, but the question to be asked is How long an economy can survive the negative output growth due to reduced demand for domestic products. Ultimately consumers are also producers. They earn through producing and consume using their disposable income. If all the goods we consume are from other countries, what will be the source of income for our men. If it's only USA which is expected to consume the Chinese products and Indian services, what would our men do? Developing countries on the other hand encourage their citizens to save and also provide considerable incentives for that matter. Is the whole world contemplating to overcome recession only through US spending?. President Barack Obama has got a lot of work to do to keep the American expectations alive. He needs to handle the matter diplomatically and try to put international pressure on Chinese to remove unwarranted regulations on their currency to make the playing field leveled for everybody.