Micromax, the 10th largest mobile phone maker in the world, has a deal for Israeli start-ups that company CEO Vikas Jain hopes they can’t refuse. “We have a base of hundreds of millions of users all over Asia and sell about 3 million new devices a month,” says Jain. Start-ups with good apps don’t need to be bought out by Google or Facebook. “We promise to actively promote any Israeli app we partner with. You could make a lot more money than you would in a buyout.”
In an exclusive interview with the English-language media, Jain revealed that Micromax was in “advanced talks” with an Israeli distributor for the sale of his company’s smart devices. Android-based, lightweight, with a 13-megapixel camera (front and rear), a 1.3 GHz quad-core processor and other smartphone-standard features, Micromax’s devices can compete with comparable offerings from Samsung, LG and others, but for much less money. “We expect to be able to sell on the Israeli market for $220, which I understand is considerably less money than what comparable phones are sold for here,” he said.
Micromax is looking for more than a new marketing channel as it enters Israel. Over the past week, business delegations from around the world were in Israel for a series of forums and events, highlighted by the Tel Aviv MIXiii 2014 conference, the largest tech event to be held in Israel this year, with many officials talking about how India and Israel could prosper by working together. The model Micromax is proposing, said Jain, is a realization of this concept, perhaps the first major opportunity for Israeli companies that are not in the defense or agriculture industries to take advantage of the huge Indian consumer market.
“We respect the huge potential among Israeli app makers,” Jain said. “There is a lot of great technology here in a number of areas, including mobile security, crowd, location-based apps, lifestyle apps and more. We want to make these apps a part of our mobile phone ecosystem.”
Micromax, formed in 2000 as an IT software firm, over the years began to manufacture 3G data cards, LED televisions, mobile phones and tablets. With a 22% market share in its home country, the company is the second largest seller of phones in India and among the top 10 in nearly all Asian markets, specializing in low-cost smartphones, “democratizing” the smartphone experience and “bringing the gospel of smartphone utility to the masses,” said Jain.
Among its innovations was the introduction last year of a smartphone with a battery the company says can last for a month without recharging under normal use, exactly the kind of thing that appeals to hundreds of millions of Indians who live in rural areas where electricity supplies are spotty at best.
Jain sees Israel as a market for phone sales. As one of the most connected nations in the world, he believes that his reasonably-priced phones will do very well here. Given Israel’s position as a “window” to the US and Europe, Jain hopes to be able to introduce his products to the West via Israel’s commercial ties.
It is Israeli research and development that really interests Jain. “Smartphones have today evolved into lifestyle devices,” he said. “People use them to monitor their health, get information, entertain themselves and their friends, build community and much more.”
Although many industry experts do not always agree, Jain is convinced that it is the app business that leads the manufacturing industry. “When lifestyle apps are developed people want to use them, and manufacturers have to develop devices that can use those apps. We want to integrate the best apps and mobile software platforms into our ecosystem and create a hardware and software experience that will be second to none, and we see Israeli apps and mobile tech as a key to this,” said Jain.
Micromax’s main challenge is to compete against many other players for the really good apps. Waze, for example, was courted by Apple and Facebook before selling itself to Google, after Google bid up the price to over a billion dollars. Other apps, such as Viber, have been sold for hundreds of millions of dollars. Focusing on Israeli apps could be an expensive proposition.
Expensive, if he were to compete in a bidding war, said Jain, which he is not planning to do. Instead, he plans to partner with Israeli app makers. By bringing apps to Micromax’s core markets, Israeli apps will get a great deal of exposure, with hundreds of millions of Micromax phone users having direct access to their technology. Partnership and revenue-sharing agreements could net app makers a lot of money, in many cases more than they would get in a buyout from a multinational, Jain believes.
Jain even offers a “money-back guarantee” of sorts. “When we partner with an Israeli app maker with an app we think our customers will like, we promise to do everything we can to make sure it will be adopted. We will not just be showcasing apps, we will be pushing them.” That way, Jain said, app makers can be positive that they made the right decision in working with Micromax. “I am a great believer in ensuring that both sides win. The Israel-India relationship can be a win-win proposition for both sides, and working with Micromax brings that concept to reality.”