Category — Electronic

As  mobile handset sales in India accelerated, there was one outcome to be expected- a race to see which mobile companies would enter the market with their latest offerings. In an Asia-wide survey carried out by Synovate on consumer behavior, it was found that Indians are the most ‘social’, of all in the group surveyed, not hesitating to use their cell phones while eating or partying. (In my experience, Indians will also use their phones during movies and funerals!).  The Telecom Regulatory Authority of India has estimated  700 million cellular phone users in 2010 (Some phones are shares among families, so this number is higher than the number of current subscriptions)

So, it’s no wonder that Dell has set its sight firmly on the Indian market. On 3^rd Feb 2011, they released two smart phones, the Android powered Dell Venue and the first Microsoft Windows  7 powered phone for Dell, The Venue Pro.

The former has a stylish, one touch interface with a 800 x 480 pixel resolution. It runs on Android 2.2 and has a 1GB internal memory and a 16 FB microSD card included. It also supports business users with WiFi, Bluetooth and USB connectivity. The Venue Pro has a sliding interface for input  and a more hefty price tag of Rs 34,990 (US$ 771). It also has a 1GB flash Rom and a 16GB stored memory card. Currently it is also offered as a bundle package with the Microsoft video game console the Xbox Pro, for the Indian techie who must have everything.

While there may be some concern that Android phones are outsmarting most other options, Dell is confident that the Venue Pro will be much in demand in the Asian market. Both phones also have what is growing to be an increasingly popular requirement in all cellular phones- a high megapixel camera and a richer media setup to store music and photos. They also come with Dell’s Proprietary UI called Dell Stage,  first shown the Consumer Electronics Show in Las Vegas last month.   In the Indian market, these phones will be competing against Motorola’s Atrix and Droid models and Sony Ericsson’s Xperia X10.

While the company has a long history in India’s personal computer market, it entered mobile telephony  just months ago in  November 2010, with their XCD28 and XCD35 handsets, followed by the Dell Streak. Bolstered by their success, they are planning to launch a 3G network over the next few weeks.

APW President Systems Ltd. which designs and manufactures standard and customized racks and enclosure systems in India, serving information technology and telecom end-users, was acquired by French giant Schneider Electric. In 2009, Schneider Electric acquired Bangalore-based Meher Capacitors, which makes power factor correction capacitors and another local company, Conzerv Systems, in the energy efficiency market.

With 380 employees and annual sales of about $22 million, APW President Systems has manufacturing facilities at Pune and Bangalore. Laurent Vernerey, Executive Vice-President of Schneider Electric’s IT Business commented: “APW President Systems Ltd brings to us the expertise to customize racks and enclosures for our global data centre customer base. With this acquisition, Schneider Electric becomes a leading Indian player in integrated data center infrastructure solutions and further accelerates its development in the domain of data centers.”

Schneider Electric proposes to acquire shares representing a maximum of 75% of the share capital of the company by acquiring a minimum of 55% of the share capital from the promoter shareholders of APW President Systems Ltd.  and up to 20% of the share capital of the company pursuant to a mandatory open offer to be made to the other shareholders.

More such acquisitions, joint ventures and partnerships are likely to unfold as India builds out its infrastructure. Western companies are also beginning to consider India as a base for regional operations in surrounding countries.

Who says you can’t beat the Chinese and Korean companies in mature categories? Look at Whirlpool’s spectacular run in India.  The American company known for washing machines and refrigerators reported a 32 per cent sales increase in India in the six months ending September 2010.  Profits of their India company grew by a third as well and its stock, traded on the Mumbai stock exchange is at an all time high.

The company entered India with a manufacturing facility in the former French enclave of Pondicherry in the late 1980s. Shortly after India liberalized, Whirlpool made a bold move by acquiring an India refrigerator brand, Kelvinator, at a time when such acquisitions were almost unheard of in India.

Its success recognized the need to create products that address India’s unique needs such as frequent power outages, the use of servants to wash clothes by hand, and middle class concerns about bacteria in India’s tropical climate.   In my book, I talk about how Whirlpool washing machine ads used to compare its agitator with hand-washing (as if to imply that the machine is almost as good as your servant’s hand washing).   One of their latest products, the curiously named Protton refrigerator (below) boasts a  “Freshness Booster System” keeps vegetables fresh  via the use of de-oxidizers and humidity locks, for example. Indian spicy aromas tend to interact inside a fridge and smell up the milk or ice cream; Whirlpool provided three doors on the new model, with separate zones for systematic and odor free storage of frozen food, fresh food & vegetables separately.

Whirlpool's new Protton Fridge

Whirlpool is also branching out beyond India’s top cities to address markets in 2nd and 3rd tier towns where many Indians are buying their first major appliances. Its competitors are Chines companies such as Haier, Korea companies including Samsung and Lucky Goldstar and some legacy Indian brands.

California-based Juniper Networks is planning a major expansion to its research and development center in Bangalore, India. The company will add 750 seats and 450 equipment racks at a new site (Prestige Exora Business Park) in Bangalore over the next two years. The company currently has 1,800 staff members and 300 employees of development partners located in Bangalore.

Its operations in India are responsible for a full spectrum of activities including hardware and software development, test engineering, field trials, program management, quality assurance, technical documentation and product line management. It also provides 12-hour-a-day global customer support covering all Juniper products and operates a Finance Shared Services Center, which delivers functions to Juniper Finance organizations across the world.

“This expansion reflects our ongoing commitment to increasing the depth of experience and expertise in the India region, which is becoming increasingly important not just as a source of engineering talent but also as a fast-growing market for Juniper Networks,” said Sridhar Sarathy, managing director of IEC at Juniper Networks.

Cardiac Science of Bothell, Washington  has agreed to be acquired for $2.30 per share by a medical equipment company based in Bangalore, India. The all-cash deal represents a 10 percent premium to Monday’s closing price of Cardiac Science shares, the companies said Tuesday.

Opto Circuits (India) Limited of Bangalore, which will pay $54.6 million for Cardiac Science, is a developer and marketer of healthcare equipment including pulse oximeters, patient monitoring systems, sensors, digital thermometers, anesthesia and respiratory care equipment, and stents. It reported revenues of $243 million in the latest fiscal year, and sells primarily in the US, Europe and South East Asia. Opto Circuits will fund the purchase through cash on hand and lines of credit.

Opto Circuits Chairman and Managing Director Vinod Ramnani said the deal helps his company venture into the noninvasive diagnostic monitoring and “high-growth” automated external-defibrillation markets.  “This transaction is expected to open many new global markets for Cardiac Science’s products and will greatly enhance Opto Circuits’ product offering and presence in the United States,” Ramnani asserted.

While companies from India are getting ambitious about M&A in the West, they continue to be value-seekers as we see in this deal to buy a distressed medical device company. Earlier this year, the company agreed to replace 24,000 AEDs for U.S. medical facilities and emergency services under a revised recall plan the company has negotiated with the U.S. Food and Drug Administration.  So don’t expect a wave of such buyouts in the next quarter.