In between 2000 to 2005, most of
the global Mobile Phone Giants like Motorola, Samsung, Sony, Ericsson,
Panasonic, Sharp and many more battled hard to capture or recapture the lost market
share. The dynamic change in Mobile Device design led by Samsung Camera phone
took the other giants like Nokia and Motorola by surprise and start gaining
market share in Europe which used to be the cash cow of these giants.
During that period, Chinese Mobile device user's generally opted for global brand in the lieu of missing
local players. Most of the global giants bought manufacturing space in Chinese
ODM's to ensure the lost cost of production to maintain the fat margin to
support their very high cost oriented research and development team whereas the
local Chinese ODM's were happy with their business and revenue model.
The entry of Open Source Android
on the one side gave a flip to new era of innovation to Device OEM's with their
own flavor of Android with multiple differentiated features. Most of them used
to take the help of ODM' resources to get the features implemented before
giving a go-ahead to ODM for mass
production.
The Strategic move of global
player to consider Chinese ODM's as manufacturer turned out as suicidal. The
continuous half a decade training to thousands of Chinese ODM's resources acted
like a backbone of new revolution within Mobility Industry as they started
designing their own devices and first penetrated into local and surrounding
market place. The sudden loss of market share of Motorola and Nokia in China
encouraged the local government and they offered special economic help to
innovators to start their own Mobility brand.
By 2010-11, many small time ODM
player of 2005 era became the giant of mobility business in China as well as in
oversees market. The speed of innovations, speed of execution while keeping the
cost low completely knocked out many global giants. Motorola got into trouble
even after very successful product of Razor in 2005 to 2007 and got sold out to
one then ultimately landed in Chinese player kitty. Once the supplier became
the owner of Motorola. Sony Ericsson faced the similar fate and it forced
Ericsson to sell its stake to Sony. Samsung lost its position in China.
In
my opinion, It was not the strategic blunder of Global giant but the Government
rule related to salaries and taxes. For example, Finnish government took Nokiaas money minting machine and completely failed to promote and protect the
organization at the time of need. On a contrary, Apple strategy worked
fantastically due to their very secretive nature when it comes to their
software and hardware business.
