John Sculley, the former chief of Apple, is funding a venture that aims to launch low-cost smartphones in India, to be priced between Rs 5,000 and Rs 8,000.
We don't have 19,000 employees like Nokia. We believe in the frugal Asian expense model.
John Sculley
Ex-CEO
Apple & Pepsi
Also Read: Ex-Apple CEO who 'fired' Jobs to launch smartphone in India
In an exclusive interview to CNBC-TV18's Shereen Bhan, Sculley said he hopes to sell a million units and turn profitable in five months. Sculley is bullish on India and promises to invest big bucks in the coming days.
Below is the interview of John Sculley with CNBC-TV18's Shereen Bhan
Shereen: First thoughts on Apple…
A: Apple has done a brilliant job of setting an aspiration of what you can do with a smartphone. However it costs Rs 50,000. As we look at this market it is just shifting from 2G to 3G. So, the feature phone companies that have been successful starting to make the transition into smartphones for 3G have done it at a time when the market is exploding with growth.
Shereen: So, there is no doubt about the growth in the market. However you have already got the Apples, the Sonys, Samsungs of the world here and of course they are priced very high in comparison to the local Indian brands. You talked about Micromax. You have got Ajay Sharma from Micromax to head your mobile business here in India. However they have already captured a significant space in the Indian market. Micromax last data shows about 16 percent in the smartphone market, the second-largest behind Samsung. Do you believe that you are going to be able to take on that kind of competition?
A: Micromax has done a good job. Sony is a great brand, Apple is a great brand but we don't have 19,000 employees like Nokia has. We believe in the frugal Asian expense model. Our goal is to probably in about 5 months time to get to about a million units sale and to be a profitable company.
Q: How do you really optimize costs? How do you squeeze costs out, what is the magic of this frugal expense model?
A: Lot of it is going virtual. In other word we don't build overhead. We will virtual out to partners where we can, where we think we have to own that part of the business ourselves we will invest in it and own it ourselves. I looked at buying Blackberry earlier this year and we were prepared to pay about USD 4.5 billion to acquire it and then they pulled the auction in and decided to go in the different direction with a outstanding CEO John Chen. If any one is going to turn that company around it will probably be him. However when we looked at the Blackberry organization, they had we estimated 6500 people. If we had acquired it we probably would have done with a few hundred people. So, we go in and we don't build a lot of overhead into these businesses and that is a key part of running the Asian frugal model. You just don't add a lot of overhead.
If you look at companies like Nokia with 19000 employees or Blackberry still has around 10000 employees, it is very hard as technology commoditizes to carry that kind of burden. So, we just don't do it that way.
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