Understanding Hardware Modularization in the Android Ecosystem

Guru Prasad has an amazing website where he writes on a variety of topics related to India.

In the context of innovation in smartphones, he has written a wonderful series of posts which answer the following question in great detail and clarity;

“How do companies like Micromax & Karbonn offer smartphones which are similar to Samsung & HTC but at less than half the price?”

  1. Micromax Phenomenon: Propaganda or Reality?
  2. Part 2: Micromax Phenomenon: Propaganda or Reality?
  3. Part 3: Micromax Phenomenon – MediaTek Revolution
  4. Part 4: Micromax Phenomenon – Quad Core Myth & Propaganda

I suggest everybody who is interested in innovation to read all of these posts.

I myself have just started to read these posts, but I found this paragraph which I think sums up very well the reason why Samsung is struggling.

As we can see from the above examples, Indian companies like Micromax, Karbonn and others place bulk orders from Chinese OEMs and sell them under their own brands in India. It might come as a surprise to find that even companies which are no way related to cellphone industry, nor have the experience have begun to buy from OEMs and sell them under their own brands. Even a water heater & wet grinder company like Kailash is selling Android phones under it’s brand. Television companies like Videocon & Onida also do not want to miss the race and have introduced several phones under their brand.

This is quite extreme but is not without precedent. Basically, any company in any industry that has brand recognition or direct contact with customers, can now extract profits by selling smartphones through their own brand.

It reminds me of the PC industry in the 1990s. In Japan, there was a cult religion called Aum Shinrikyo which decided to enter the PC business. They assembled PCs and sold them through their own shops. And they were quite successful.