Due to this flexibility or rigidity, Nonika lost touch of its market, which gave the competition enough space to seize the market share of low-income consumer segment. MicroVAX, which is currently ranked third in the mobile handset industry, took a large chunk of market share away from Monika because of the developmental flexibility. New innovative features like dual Simi and wireless radio were offered by MicroVAX in its products. Monika, however, failed to arrest its market share, because it could not add such innovative features in its handset. Due to this, MicroVAX zoomed to third position in the market, while it started as a small trader/dealer of Monika products in India.
Nokia Became Laggard in Smartened Market. Stiff competition from Samsung and Apple, and lack on focus on innovation was the second big reason of collapse. Even if users could ignore the SO, the the hardware features which Monika was rolling out were quiet late as compared its major competitors Samsung and Apple. Monika seemed to be lagging in the race.
Where Samsung from nowhere entered the race and focused on innovation as its core impotence to gain the market share, Monika was very late to realize this fact. Samsung did everything right to focus solely on product innovation and started competing with Apple in all product lines from smartness to tablets, but Monika failed to develop a focused device strategy.
Losing Market Share on Both Ends Monika not only failed to realize competition from Apple, Samsung, Sony, Blackberry in high end smartness, they also failed to notice the stiff competition in the lower segments of phones. Where Monika was loosing charm in high end phones, the competition from MicroVAX, ETC, Hawaii and ZIT squeezed the company’s market hare in lower segment too. This led to double trouble for the company. The company which used to have epic models like Monika 1100 suddenly started losing at lower ends too. Very lately company realized this thing and launched their Ash series but by that time they had already lost the game.
Failure to Implement the Right Umbrella Branding Strategy Apple was the first phone to use the strategy of umbrella branding using phone as an umbrella brand and then building subsequent models each year. Samsung was quick in identifying this concept and they started building their high end phones with Galaxy S series. Monika on the other hand used to have used an umbrella brand in the N series and recently the Llama series, but they failed to create buzz among customers which Apple created. Apple very uniquely launches its new model in September each year and whole year it builds consumer anticipation which drive demand. But the problem with Ionians umbrella branding is that they didn’t, or couldn’t build anticipation in users.
To to conclude the Ionians story, in this high tech era with change in consumer power, the company which is missing the constant innovation has the high probability of getting punished from the customer. Inability to match expectations Introduction of new technologies like 36 shifted the consumer interest to cloud computing, new-age collaboration tools and social media. Perhaps, this was the time when Ionians strategy went seriously wrong.
It failed to innovate and add features that could make it compete with the Androids and the phones. By the time it tied up with Microsoft Corp.. Windows after a failed experimentation with Omega and dumping of its long-term SO partner, Simian Ltd. the damage was already done. Clearly, the company’s inability to match the expectations of the application developers, and a stubborn attitude are some of the key reasons for this sudden fall. Overconfidence Add to all this Ionians overconfidence of its brand recall value.
Its failure to anticipate market trends and the growing needs of consumers at both entry level and top level led to Ionians losing a significant marketers. Changing technology dynamics also made the simplicity factor redundant, which was no longer a salable concept for a company like Monika whose market strategy largely revolved around being simple and robust. Ionians dominance in the Indian rural and semi-urban markets also took a beating due to the rise of local players such as MicroVAX Informatics Ltd. ND Lava International Ltd.
- In the rural markets, Ionians biggest strategic failure was a delay in launching a dual-SIMI model, which helped Chinese and local manufactures eat into its marketers.
- Monika also failed to attract the urban Indian youth who demanded smarter and more power-packed devices that could act as their personal assistants.
- Incomes were growing in the urban areas and hence low price for an noncompetitive device became a poor marketing gimmick, which had to fail.
At the name time, players like Samsung and Apple Inc. Were constantly innovating and introducing devices that were inline with the changing trends. The rising popularity of Android and Ionians failure (or reluctance) to partner with Android only added to its problems. Today, it may have a partner like Microsoft to challenge competition, the results do not show any positives for this collaboration. Sales fugues for Windows phones are disappointing, making it difficult for application and solution providers to come to its rescue.
Samsung fans may have a reason to rejoice for now, but lets not forget that it’s not yet time for the leader’s obituary. At times, it is better to take a step back, recharge and follow a road less traveled… We hope to see Monika back in action soon! It was making so much money in India and other emerging markets that it failed to realize that it was beginning to lose ground in Europe. Moreover, the Americans had shifted mobiles center of gravity to Silicon Valley.
Almost two years ago we wrote about the emergence of Mediated and low- cost Android smartness, which were eventually going to kill everything on the low end of the handset business. Monika, my rants not withstanding, failed to realize that it was a frog that was being slow-boiled at the low end by the Mediated-based phones and by Apple’s heat lamp on the top. Just this week, Strategy Analysis came out with a report that both Monika and Samsung were getting a lot of competition at the low end of the market from Indian handset makers with exotic names like Lava, MicroVAX and Spice.
These companies are going after very cost-conscious buyers in rural India, which incidentally is a massive market. * Monika, Samsung Face Low End Cellophane Threat from Indian Moms 63 Percent of Low Income Mobile Users Want to Buy Indian” Monika enjoys dominant market share in India, but a majority of low income Indian mobile users surveyed by Strategy Analytics would prefer their next phone to be made in India.
Indian brands?like Lava, MicroVAX, and Spice?will benefit from this preference, according to, “Monika Dominates Low-Income India but Domestic Moms Enjoy Strong Home Country Support,” a report from the Emerging Markets Communications Strategies (EMCEES) service of Strategy Analytics. International brands that do not enjoy Ionians brand equity?such as vendors Samsung, LAG, and Sony Ericson – may have difficulties in the low-end handset market. The Indian brands have only been on the market for a few years, and collectively they have only gained modest market share.
However, 63% of the respondents, those who primarily live in rural villages and secondary cities with average monthly household income of about $130, say they would prefer their next phone to be manufactured in India, citing as key reasons: Lower cost and greater value for money, and Greater ease of repair and availability of parts. National pride is a factor, but when people spend almost 4% of their annual income on a mobile phone, they are going make purchase decisions based on what will get them the most for their money,” notes Tom Elliott, Director of EMCEES.
According to Strategy Analytics projections, the bulk of new mobile users in India over the next five years will be low income consumers, particularly in rural areas. “Affordable mobile phones with an appealing set of features will be the key to success in this market,” says Rural Guppy, EMCEES Senior Analyst in India. “National pride is a factor, but when people spend almost 4 percent of their annual income on a mobile phone, they are going to make purchase decisions based on what will get them the most for their money,” said Tom Elliott, Director of EMCEES in a news report.
How much do you want to bet that India won’t be making that much money for Monika! Indian and Chinese manufacturers know that they have a massive market, and they can use their domestic strength to springboard to other markets. Indian phone companies are looking to expand to Africa and other parts of Asia, so why shouldn’t Indian phone makers harbor such ambitions? It also goes for the Chinese brands Hawaii and ZIT are already making a killing. Monika, which has ruled the emerging (phone) markets for so long isn’t going to rule them its raja is over.
Now let’s look at today’s deal: Microsoft and Monika. Earlier this week, I wrote a post about how companies have a tough time trying to reconcile with change. Make no mistake: Monika is a great hardware company with awesome logistics capabilities. As a result, it makes perfect sense that it should focus on its core strengths, and it is doing so by teaming up with a partner who has the desire to spend billions to build an ecosystem. The problem is that it is picking the wrong partner. There has been a lot of emotional outpouring on the Microsoft-Monika partnership, so I won’t repeat much of it.
Instead let me explain why picking Microsoft is the wrong strategy. Windows Phone 7 is a nice and interesting platform. Its difference has gotten it kudos. What it hasn’t been able to do is get a lot of developers. And despite all the public boasting, it doesn’t have that many users: only 2 million shipped sold. Those quibbles aside, Windows Phone 7 has a much bigger problem. Four years ago when Apple launched the phone, it essentially defined the metaphor for a very touch-centric, smartened world. Later when it added APS, it only reinforced usage behavior.
The subsequent launch of Android SO and Android- based phones were a reflection of the user experience that had been popularized by Apple. Today, from an average phone buyer’s perspective, Apple’s and Android’s I-Jell is essentially the standard that consumers expect from a smartened. Do Microsoft and Monika truly expect that people will learn yet another new behavior? I think the two companies are being overly optimistic in their belief that their LU is going to catch fire with consumers Just because Monika is putting Windows Phone 7 on its smartness.
It is akin to buying a sports car today, hoping to pay for it with by winning the lottery on the weekend. In a colorful note today titled “CTR+Alt+Del,” RFC Markets analyst Mark Sue asked the question: “This is a major reboot and it will take some time for Monika to offset the decline of its Simian devices with Win phones. Will this be a true partnership or will bickering stall the process before the first phones are shipped? ” The bickering he is talking about is between happy friends today! Mountebank of mobile So am I faulting Monika for partnering with a third-party SO? No, I am not.
In fact, if they were going to make the move away from their own proprietary operating systems, then they should have opted for not Just Microsoft SO, but also for Google’s Android and whatever else is out there. Today Microsoft, Android in a few months, and whatever comes next ? that would have been the right strategy. In other words, take a page out of Samsung playbook. It would have allowed them to have scale, have multiple market entry points and essentially leverage their core DNA: their ability to make good hardware and use their logistics to push it into the market.