I agree Bolaji, this does seem like a sensible move for Toshiba. However, I believe that trying to cultivate a more local presence in India doesn't make sense for many electronics companies; India itself is still a very questionable market for many of the higher-end products specifically. Given the additional logistical and infrastructure issues still common in much of India, I generally think -- at this point -- it only makes sense to invest in India if you're planning on aggressively pursuing the Indian market.
Jokingly, I wonder if Toshiba has already outsourced their marketing department to India... have you seen their television ads lately? Inexplicably bad, in my opinion!
Every manufacturing companies would like to tap into the India growing market if they could. That is what Toshiba is willing to do and it perfectly makes sense. Local manufacturing of Toshiba products will surely help save money and help increase Toshiba's presence in the Indian market, which is a very promising market.
This could turn out to be beneficial for Toshiba in India. There is potential for huge sales growth and the fact that there is currently low level penetration of high tech manufacturing company in India makes sense.
Toshiba is not playing in the right sectors. It will be very difficult to enter smartphone and LCD TV unless they market agressively. They will still need 5-10 years to displace currenly popular brands such as LG, Samsung, Sony, Philips etc. I also do not know if Toshiba makes smartphones/TV?
True Saranyatil, Toshiba has already good presence in laptop, netbook sector. for dominance, they need to capture the cheaper segment of the market. So they need to break the cost somehow. China is already cheaper manufacturing destination. The only benefit by moving manufacturing to India can be to get some government subsidy and help.
The cost will naturally come down with demand and the elimination of shipping cost of finished product into India. The market is there in India. This is a win-win for Toshiba and the Indian people.
You absolutely right that very difficult to enter smartphone and LCD TV unless they market agressively. I feel Samsung and Sony which are favourite brand among Indians had early move advantage. Needs to be seen what strategy Toshiba would use to compete with them.
@tirapur, i believe that marketing has not much to do with the quality of the produce but quality certainly helps. If a product can achieve a critical mass sale then the rest of the sale is self-fullfilllng prophesy. I remember that marketers used sports (cricket as it is vastly popular) to reach masses by sponsoring the events. Toshiba can probably learn from that. Apart from that market through popular figures such as movie stars.
With the korean giants LG and Samsung having strongly established their base in India and having captured a majority of market share in Consumer Electronic products in India , I wonder how much this move by Toshiba will succeed. Both of these Korean giants have displaced the earlier popular brands in Inda such as Philips, Sony, Akai and Sharp. It may be a tough battle fo Toshiba.
I think one of the biggest advantage for Toshiba will be the availability of cheap labor in India. There's a large pool of skilled and unskilled labor with a high rate of unemployment. With Chinese labor becoming expensive lately, India may become the next big attraction for manufacturers. I think the Indian government needs to work on ensuring stable domestic conditions in terms of security and infrastructure to further encourage foreign investment in the country.
Toshiba is the first of most likely many companies to commit to India's call for manufacturing. I think many global companies are going to wait and see how well Toshiba's investment in India works out before they invest more money in the country. India has huge potential to become a standard thought when looking to build or expand manufacturing facilities. India still has infrastructure problems they need to work out before companies fully embrace the idea of setting up shop over there. With the Indian people looking to upgrade major amounts of electronics, Toshiba should do well.
It is a very valid point made about infrastructure consideration before investing. Infrastructure issues will definitely add to the cost or unforeseen expenses. But I think Toshiba will be able to cater to the price needs of the local market if they are present right in India for production/manufacturing.
It will good turn for toshiba, even though LG and Samsung secured a top positions in the sales. If toshiba comes with a new technology goods it will top the market in a little time as people are know already toshiba products are reliable.
In a lot of ways this feels very,very similar to the Chinese strategy of ensuring that all Western Manufacturers not just manufacture locally but share their technology with their "partners" as well if they wish to do business in China.
China has used this strategy to become the undisputed Numero Uno in this area.In that sceanario what chances(if any )does India have of competing with the Chinese Manufacturing colossus which already is known as the workshop of the world???
However there is no disputing the fact that Growth in Semiconductors driven products(especially as they are coming of a low base) are expanding very,very fast in India.
Requiring manufacturing investment as a precursor to business opportunities has been used by many other countries in the past - and as long as the giva and take is fair, it is probably reasonable. After all, the populace needs sources of income in order to have disposable income.
I think this is really a great move by Toshibha to built a manufacturing plants with in India to serve the needs of India. The demand for consumer electronics is very high which will help Toshibha easily recover the investment with in no Time. Is more companies are in line for this?
Also, while Indians have eagerly embraced mobile phones, manufacturers now consider the country a potentially huge market for smartphones as average selling prices for the product decline.
Bolaji,
I would say smartphone usage among Indians is already on the rise. Samsung galaxy mobile which costs in the the range of 250$ is big hit among Indian consumers. Nokia which was once the favourite among Indian consumers lost badly by sticking to symbian OS. Needs to be seen what strategy Apple will implement to tap this huge market.
@tiralpur, Also India is bifurcated market in itself as there are rich, middle class and poor. Smartphones are popular with the first two category only as there is a huge gap between this category and the poor. Nokia surely is popular but it has been hit hard by Chinese cheap phones (sometimes even competing with smartphones). It will be interesting to see how companies woo poor people as price is the major factor for them.
Bolaji, iPhone is available in India but the trend i see is that only rich or high-middle class people can afford it. Also, as these people often go to USA/Europe they buy their mobiles or other high end gadgets there. But for sure iPhone is popular. As for Nokia and Samsung are more affordable, people tend to buy mid-range phones from these manufacturers.
There is a huge competetion in india electronics market which already reduces the prices a lot. If Toshiba comes with a manufacturing unit in india definitely it will grab large ratio of the market sales.
iPhone is available in India, but its not as popular as Samsung. Samsung is the clear winner in smartphone segment. People who used to buy Nokia N-series mobiles are opting for Samsung/HTC android mobiles.
Many vendors do come to India for local manufacturing. But Indians are quite dissapointed with them. Reason is that they dump old technology in developing country. Toshiba may not manufacture latest state of the art product which Indians want but they will give them very few option of old technology which Japan, USA and Europe is not interested. This happens so often. We have similar feeling even in Canada. As compare to USA, Canadian have much less option in these white good market or they may get them only after few months or year.
I wish Toshiba is sincere and brings best technology to India.
EBN Dialogue enables and encourages you to participate in live chats with notable leaders and luminaries. Not only editors and journalists, but the entire EBN community is able to comment and ask questions. Listed below are upcoming and archived chats.
Archived Dialogues
Thailand Stages a Comeback Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Euro-Crisis: What It Means for High-Tech Firms Join EBN Editor in Chief Bolaji Ojo and Contributing Editor Jennifer Baljko on Thursday, July 12, at 10:00 a.m. EDT for a Live Chat on high-tech and Europe's economic difficulties.
Microsoft Surface: Potential Winners & Losers What are the implications for the electronics industry supply chain of Microsoft Corp.'s decision to launch its own tablet PC? Join industry veteran and EE Times' systems and OEM expert Rick Merritt on Tuesday, July 3, at 12:00 pm EDT for a Live Chat on this subject.
Join EBN contributor Jennifer Baljko on Thursday August 23, 2012, at 11:00 a.m. EST for a live chat on how electronic manufacturers in Thailand have shored up their supply chain to reduce the impact of future natural disasters.
Peter Drucker famously said "Trying to predict the future is like trying to drive down a country road at night with no lights while looking out the back window." Yet in the razor's-edge world of electronics—with a lean supply chain and just-in-time demands—the need to know the future is vital.
While no one really can accurately predict the future, we can take guidance from another Drucker saying which is the best way to predict the future is to create it.
You've heard the saying "the No. 1 supply chain risk is your people." That hasn't always been the case. But today's complex global supply chain requires a new type of multitalented employee. It's one who understands, finance, marketing, economics, is savvy with technology, graceful with relationships and can think analytically.
Where are these people? Are universities properly preparing the next generation supply chain professionals? How do train your existing workforce for these new, demanding positions?
Brian Fuller, editor-in-chief of EBN, will lead a 60-minute Avnet Velocity panel discussion that will ask and answer these and other questions swirling around today's supply-chain talent challenges.
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