Web 2.0 and politicians

First it was Omar Abdulla and now it's Sashi Tharoor.Omar's blog was hugely successful but due to a lot of unfavourable comments made on his blog,he quit the Web.Tharoor is in the face of a controversy over a tweet made on Twitter regarding MP expenditures.The partly is not taking it kindly.Whatever the arguments and counter arguments my interest is in the technical aspects of the whole issue.In fact Tharoor has become one of the ambassadors of the Congress Party in Web 2.0.The Congress has not been very effective in using the net to communicate or campaign.
They have a rarely updated website.The BJP fared far better in this aspect.Now if Tharoor is forced to quit twitter,I think it will also scare away other politicians from using the Web 2.0.It remains to be seen what is Tharoors response to the whole controversy.

Semiconductor companies and Airline companies.

Warren Buffet had said that the Airline industry is a strict no for him.I guess he might have said the same thing about the semiconductor/Electronics industry.Since joining the industry more than 7 years ago,I have seen the industry in bad shape.Even during the boom for 2005-06 ,companies were in bad shape.The argument then was that the problem is in over capacity/supply and that the situation will pass once demand goes up.But,it was not to be as the sub prime crisis and recession started after that.Earlier it was supply side problem and now it is a demand side problem.Though one must concede that a lot of consolidation(M&A) happened to to solve the supply side problem.But,unfortunately most of these M&A's were failures.I will just give a few example to illustrate it..
i)Motorola acquired Symbol.But,most of the senior management/talent had to leave the company.Considering that the key takeaway for a successful acquisition is human resources,it seems to me to be an utter failure.

ii)Motorola spinoff Freescale has been a sad story all the way.It is in the selling block now.

iii)Infineon is sustaining mostly through it lucrative memory business.

iv)Siemens mobile could not be saved after the acquisition by Benque.It was an utter failure

ii)Techtronics acquired Hughes and finally selling it.The very idea of creating synergy out of the vertical integration backfired.

iii) NXP is spinning off new companies ever other day.One of my friends joined Connexant.Then he got transferred to NXP as a part of an acquisition.Now he is in ST-NXP due to another M&A.All this within a 2 years time.

Mobile Phones and Connectivity-Solutions

I think that the solution to the problem as I posted in the last post is actually a very big opportunity for the semicon companies.Phones with higher computing power at affordable
rates should be made available the masses.This is possible by having a higher volumes
strategy with lower margins for higher computing power phones rather than treating them as premium products with higher margins.Secondly,the price of these phones can be brought down by using open platforms in them and selling them with customised software.So,that users only pay for what they need rather than making them pay for a host of exotic softwares on the phone which they will never use.

The second problem of poor quality connectivity will be solved by the coming of 3G services.

Mobiles and digital connectivity--problems

Looking at present statistics,mobiles seem to be the only gadget which has the highest penetration in India.Looking at the wide penetration of mobile phones,many experts are proposing to provide a host of services using the mobile phones.The service includes Internet connectivity mobile banking etc.No doubt the idea makes a lot of sense as it will provide access to a host of services to a wide array of citizens.But,I see two major problems with this idea.

(i)Low End Phones:-
Most of the phones being sold in India are entry level with very low computing power.They have very simple or no application processors with low computing power.The focus is more on the base band processing part for voice services.To run some applications,it needs to have a decent application processor.Looking at the current scenario,even mid range phones struggle to run ordinary applications.The so called higher end phones are exorbitantly costly.

(ii)Low speed Internet connectivity:-The supposedly 2.5 G services like GPRS provide very low speeds and practically unusable from mid range phones.Even if the connectivity is decent ,the data charges are exorbitant.Airtel charges 399 for downloading 500KB in Blackberry.

---Next post I will offer some solutions..

Telecom companies and VOIP

Just the other day during a TV program,the noted investor Ramesh Damani said that he is not bullish on telecom companies as Google Voice(read VOIP) is going to dominate the voice communication market resulting in reduction of tariffs for the telecom companies.This in a way is ironic as VOIP also happens to use the same telecom network but using a different type of connection i.e packet switching as opposed to circuit switching.Since data transfer rates are happening at such a fast rate there is practically no difference in quality between a circuit switched normal telephone call or a packet switched VOIP call.So,people will not be ready to pay the extra premium for a normal telephone call.This will increasingly be the case as improved terminal devices to make VOIP calls come to the market.

Now,the telecom companies are making most of their revenues through voice services and if there is a reduction in voice services usage either they will have to increase the revenues from data services with higher rates or reduce the voice services tariffs to comparable rates as data services to increase volumes.I think they will have to do both to maintain viability of their businesses.As of now VOIP is more or less a free ride for most users.At the end of the day there is nothing called a free lunch.And,I am still bullish on telecom companies as the good ones will innovate to find new revenue streams.