Prof. C. K. Prahalad

In 2004, renowned professor C. K. Prahalad had written an award winning book about the potential fortune that lies at the bottom of the pyramid. The concept was a paradigm shifting experience for businesses around the world. I’ll be honest I have not read this book and so I don’t know anything beyond the fact that it talks of eradicating poverty through profits.

Over the past many months, I have increasingly being very excited about low end devices and products that have been launched in the Indian markets, it’s simply because a country like India is very unique. It is a country that demands the latest in terms of technology, after all we are an IT nation and yet at the same time has a larger population, than some developed countries, that do not understand nor do have any use for this level of technology.

Mobile telephony in rural India

In such a country and in many more nations, it’s this section that will define how technology will ultimately be used; Even though early adopters and technology oriented segments of  the population will still push the envelope, it’s the former section of the populace that will ultimately define technology.

This segment is unique as its needs are absolutely different from what your or my needs are. They want to have their basic needs satisfied and don’t want to be hassled with too much tech on their phones. They don’t want Facebook or IM on their phones. They however do want FM radio so they can be connected to the world, they want loud speakers – so they can hear things in a noisy environment, they want long life batteries because electricity is still a luxury where they live, they want a large screen with colour so they can see clearly and enjoy a bit, they want a rough and tough phone so it can weather the tough terrains and conditions they call home. The list is not complete and there a lot of additions to this list. But the most important factor that I must mention is that it should be affordable.

Spice Mobile: Redefining mobile telephony

Companies in India like Micromax, Intex, Spice and many more have discovered this niche category and are targeting them with these features and more. Nokia and Samsung have also been very aggressive in this category, though, of late, Nokia seems to have given this category a miss. With very few new products in this category from Nokia, Samsung has had an almost free run allowing Samsung to become 2nd largest mobile manufacturer in India. This is the category which actually holds the largest fortune for a company and Nokia has missed out on it.

The fortune is truly at the bottom of the pyramid!

There are various reasons for it, let me elaborate a few in no particular order. This section of the population is probably buying a cell phone for the first time and this means they are looking for something that fulfills their basic needs. This segment of the market is where future repeat customers will come from, for any company. If a customer likes the product the first time and the service associated with it, he will return to that company for an upgrade. If he isn’t, the company will lose more than just a customer. Real innovation is not limited to just cutting edge technology in high end phones, but also in introducing them into low end devices, the basic needs are not so different after all. Everyone wants good sound, great battery life, etc. This segment of the population is the real drivers of the countries they reside in. Empowering them will not only help in building the economy but also in eradicating poverty through knowledge. The number of reasons for paying attention to this segment is numerous, from economy to environment; they all can be linked to this segment.

The Vodafone 150 and 250

With Nokia rumored to be working on a Rs. 500 phone (US $10-12 phone) and Vodafone having just launched the Vodafone 150 and Vodafone 250 at US $15 and US$20 (approx. prices) it is clear that they are realizing that the market doesn’t just want iPhones and smartphones. ‘Dumb’ phones are the new feature phones, in my opinion.

After all this segment which represents the bottom of the pyramid is where the real fortune for telecom companies lies. So while you and me drool over pico projectors in phones and 4G, let’s not forget that the basic phone is where the actual earning and future of mobile telecommunications exists.

There are various reasons for it, let me elaborate a few in no particular order. This section of the population is probably buying a cell phone for the first time and this means they are looking for something that fulfills their basic needs. This segment of the market is where future repeat customers will come from, for any company. If a customer likes the product the first time and the service associated with it, he will return to that company for an upgrade. If he isn’t, the company will lose more than just a customer. Real innovation is not limited to just cutting edge technology in high end phones, but also in introducing them into low end devices, the basic needs are not so different after all. Everyone wants good sound, great battery life, etc. This segment of the population is the real drivers of the countries they reside in. Empowering them will not only help in building the economy but also in eradicating poverty through knowledge. The number of reasons for paying attention to this segment is numerous, from economy to environment; they all can be linked to this segment.

Advertisements