Newsweek Cover Story on Novatium

Newsweek (International Editions) feature the $100 PC on their cover, with a major focus on Novatium and what we are doing.

If Rajesh Jain is successful, the NetTV, which hooks up to any television, could be the first in a family of devices that connect the next billion people to the Internet. Jain, 39, is cofounder and chairman of Novatium, the Chennai-based company that makes NetTV and NetPC, a similar product that uses a normal computer monitor. Both are based on cheap cell-phone chips and come without the hard-disk drive, extensive memory and prepackaged software that add hundreds of dollars to the cost of regular PCs. Instead, they are little more than a keyboard, a screen and a couple of USB portsand use a central network server to run software applications and store data. Novatium already sells the NetPC for only $100just within reach of India’s growing middle classand Jain believes he can soon drive the price down to $70.

Despite [India’s] rise as an outsourcing hub, PCs are selling slowlyfar more slowly than mobile phones or motorbikesbecause they are too expensive, too complicated to use and too difficult to maintain. What people have been waiting for, some experts think, is a new approach to computing that boils the essence of Internet access down to its lowest costand lowest risk. Jain plans to offer all this in lease deals that include easy-to-use hardware, Internet connection, application software and servicefor $10 a month.

In case you’d like to write to me, email me at rajeshATnetcore.co.in. You can also email Alok Singh, the Novatium CEO, at alokATnovatium.com.

PS: My son, Abhishek, is also featured in one of the photos. His father took 30+ years to feature in a Time/Newsweek (Time did a story on me in early 2000), while he has managed it in less than 2!

Need for SaaS Platform

Will Price writes:

One can only hope some form of platform infrastructure emerges to accelerate SaaS companies development. If not, the merits of SaaS will be challenged by the time, capital intensity, and delayed profitability of the model. Platform companies Powersoft/Sybase, ORCL, MSFT drove down the costs of building client/server application companies. The industry needs the SaaS analogs to unleash the power of the model at the cost optimal level.

A simple analysis holds that Fixed Costs/Gross Margin = breakeven revenue. While for SaaS this is a somewhat circular calculation (as in SaaS fixed costs are amortized into COGS), the rise of platforms will drive down fixed and allow SaaS companies to reduce capital required to get to scale. Fixed costs must be reduced in order to unleash the full power of the model and the rise of platforms will reduce the bespoke investments historically required to build SaaS companies.

HBR List of Breakthrough Ideas

[via Thejo] Here. For 2007. Among them:

1. The Accidental Influentials: In his best seller The Tipping Point, Malcolm Gladwell argues that social epidemics are driven in large part by the actions of a tiny minority of special individuals. The idea seems intuitively rightwe think we see it happening all the time. Nevertheless, this isnt actually how ideas spread. Its better to focus on getting enough plain, ordinary people to sign on.

15. Act Globally, Think Locally: Companies are usually told to think globally and act locally. But thanks to their own global information systems and the Internet, knowledge from faraway places can be acquired relatively easily and cheaply. This means that firms have to discover and quickly incorporate good ideas from these diverse sources before their rivals do.

Obstacles to Mobile Innovation

Carlo Longino writes:

Too many good ideas fail because of the obtuseness of some unrelated player in the industry. Too many good peoples projects ruined because of the hoops theyve had to jump through to bring them to market. Too many companies fail because they couldnt find a market for their services, not because of poor focus or execution, but because established players simply wouldnt let them.

There are so many people, so many companies, that are capable of great things with mobile devices, applications and services. Its too bad that the obstacles they must surmount are so great as well. Thats the biggest problem facing the mobile industry. Its not technological issues like slow networks or small screens on handsets; its the ridiculous obstacles to innovation faced by both tiny developers and behemoths like Nokia. Its the obstacles that keep great ideas out of the market, that keep small companies from making a big impact.

Also see the comments on Carlo’s blog post.

TECH TALK: 3GSM Mumbai: India Mobile Industry

India has had an unbelievable year when it comes to new mobile subscriber additions. It would have been hard to believe a year ago that India would surpass China in new monthly additions but that is exactly what has happened.

Here are some key highlights based on the presentation by TV Ramachandran of COAI. In 2006, population coverage doubled to 60% and geographic coverage trebled to 30%. India crossed the 100 GSM subscriber mark (with the total including CDMA being at nearly 150 million). India added 47 million GSM subscribers in 2006. Among the key industry initiatives in 2006 were the mobile tower sharing and subscriber verification. One of the key initiatives for 2007 is mobile IM and the expatriate money transfer project. The Indian value-added services market in 2006 was Rs 2,850 crore, and estimated to grow to Rs 4,560 crore in 2007. With the world’s lowest tariffs and ARPUs, VAS is seen as a key driver for revenues going ahead. 3G is seen as the next big thing. India’s mobile subscriber base is seen crossing 250 million in 2007 and touching 500 million by 2010.

Liz Hall of Informa provided additional perspective. India had 12% of the Asia-Pacific subscriber base in September 2006 (with China being at 43%). Apac had 970 million subscribers then. India added nearly 19 million subscribers in Q4 2006. In India, the highest cellular penetration is in Punjab at over 25% followed by Gujarat, Himachal Pradesh, Haryana, Tamil Nadu, Karnataka and Kerala at 15%+. As of 2006-end, Bharti Bharati had the largest market share of 23.4% followed by Reliance Infocomm at 17.9%, BSNL at 17.7% and Hutch at 17.1%.

ContentSutra reports about a talk by BSNL’s Kuldeep Goyal: “Among the top five countries with over 100mn subs, India has the lowest number of mobile phones per 100. Couple that with low tariffs, and great utility, and you have great potential for growth. Teledensity in India is at 49.5% in urban areas and 1.84% in rural areas. Valuation of the Indian Telecom Sector is $100bn, and it contributes 13% of the GDP. Rs.10000 crores of FDI inflow in India, of which the mobile sector has 30% of the amount. Also 25MHZ is already available to be freed up by the defense in the 2.1Ghz band, and they have to vacate another 20mhz. Coverage is important, followed by local language content. BSNL has plans to set up 1 lakh customer service centers, so people don’t have to travel long distances for access.”

As I saw it, the four threads which permeated the conference were: a historical perspective of how India’s mobile industry grew, planning for the next phase of growth, 3G and wireless broadband, and value-added services.

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