 "We aim to build products of any complexity: Mahesh Lingareddy")
Hyderabad-based computer hardware start-up Smartron has come out with a 12-inch notebook convertible and a 5.5-inch smartphone, designed in-house. Founder and chairman Mahesh Lingareddy tells B Dasarath Reddy why the company did not take the easier route of selling models from China under its brand name. Edited excerpts:
What is the response to your first smartphone offering, the tPhone (launched on May 19)?
The initial reviews are encouraging. The phone was compared with Xiaomi models and Samsung’s Galaxy S7. We got a very good rating. The embedded specs balance all the different things. Shipping starts from the first week of June.
We are using the services of Foxconn. The first lot is coming from China and Taiwan; from the second lot onwards, they will be made in Foxconn’s Sri City plant. For the 12-inch ultrabook convertible, someone else is doing it for us.
What are your product plans in the next one year?
Right now, we have these two products, which we launched essentially to showcase our capabilities, involving 18-20 months of research and development on prototypes and the service experience. By the end of this year, we will have another five-six products like wearable bands, Wi-Fi routers, etc., as we look to play on the breadth of a product mix.
What differentiating factors do you count on?
One key differentiation, of course, is the front-end design. This is probably the lightest 5.5-inch device that comes with a 3,000 mAh (millampere hour) battery, 64GB storage, 4GB memory and other high-end specs. The back-up services are a click away; one of our guys will take over the device remotely to check the problem; 80 per cent of the time it is a software issue. If it a hardware problem, we immediately swap it.
Besides this, we do a lot of software work on optimisations. We are breaking down the boundaries between various devices with different platforms. An SMS received by your phone will also pop up on your laptop. A picture of your kid taken by your wife at school will automatically come to your device without having to share it on Facebook, etc.
How do you differentiate your company from others in mobile devices?
We are laying a strong foundation to build an innovation-driven, product-driven and platform-driven company of its own kind. The easy path would have been to go to China, pick up a bunch of products and sell them here under your name or outsource some of the functions to others. We decided to do everything in-house, as we’re building that whole expertise. Ultimately, we will have to be able to build any product of any complexity when it comes to smart technology, including the Internet of Things and cloud.
How much investment is required for this endeavour and how do you plan to raise these funds?
We have already invested close to Rs 70 crore or about $10 million, raised from a handful of investors. The next stage would be bigger amounts — we might need to spend Rs 1,000 crore before we start seeing scale and profits. Once we reach certain critical volumes and revenues is when we look at bringing in some institutional investors.
What sales volumes are you looking at this year or next year?
It will take two years to reach critical mass in sales volumes. We have a certain number in mind for March 2018. Till then, we will be focusing more on building our brand and capabilities. We will launch our two products in Dubai in June or in July and a couple of months later in Russia and CIS region, and then in Southeast Asia.
Do you have any particular pricing strategy?
By now, people know what to expect from us. In the smartphone segment, a lot of companies have been playing around the price range of Rs 15,000 to Rs 19,000, while Samsung and Apple products are priced between Rs 40,000 and Rs 60,000. As we compete with the best global brands, we thought somewhere in between is where we can have a good position. That is why we priced our tPhone at Rs 22,000.
What is the response to your first smartphone offering, the tPhone (launched on May 19)?
The initial reviews are encouraging. The phone was compared with Xiaomi models and Samsung’s Galaxy S7. We got a very good rating. The embedded specs balance all the different things. Shipping starts from the first week of June.
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Who makes these?
We are using the services of Foxconn. The first lot is coming from China and Taiwan; from the second lot onwards, they will be made in Foxconn’s Sri City plant. For the 12-inch ultrabook convertible, someone else is doing it for us.
What are your product plans in the next one year?
Right now, we have these two products, which we launched essentially to showcase our capabilities, involving 18-20 months of research and development on prototypes and the service experience. By the end of this year, we will have another five-six products like wearable bands, Wi-Fi routers, etc., as we look to play on the breadth of a product mix.
What differentiating factors do you count on?
One key differentiation, of course, is the front-end design. This is probably the lightest 5.5-inch device that comes with a 3,000 mAh (millampere hour) battery, 64GB storage, 4GB memory and other high-end specs. The back-up services are a click away; one of our guys will take over the device remotely to check the problem; 80 per cent of the time it is a software issue. If it a hardware problem, we immediately swap it.
Besides this, we do a lot of software work on optimisations. We are breaking down the boundaries between various devices with different platforms. An SMS received by your phone will also pop up on your laptop. A picture of your kid taken by your wife at school will automatically come to your device without having to share it on Facebook, etc.
How do you differentiate your company from others in mobile devices?
We are laying a strong foundation to build an innovation-driven, product-driven and platform-driven company of its own kind. The easy path would have been to go to China, pick up a bunch of products and sell them here under your name or outsource some of the functions to others. We decided to do everything in-house, as we’re building that whole expertise. Ultimately, we will have to be able to build any product of any complexity when it comes to smart technology, including the Internet of Things and cloud.
How much investment is required for this endeavour and how do you plan to raise these funds?
We have already invested close to Rs 70 crore or about $10 million, raised from a handful of investors. The next stage would be bigger amounts — we might need to spend Rs 1,000 crore before we start seeing scale and profits. Once we reach certain critical volumes and revenues is when we look at bringing in some institutional investors.
What sales volumes are you looking at this year or next year?
It will take two years to reach critical mass in sales volumes. We have a certain number in mind for March 2018. Till then, we will be focusing more on building our brand and capabilities. We will launch our two products in Dubai in June or in July and a couple of months later in Russia and CIS region, and then in Southeast Asia.
Do you have any particular pricing strategy?
By now, people know what to expect from us. In the smartphone segment, a lot of companies have been playing around the price range of Rs 15,000 to Rs 19,000, while Samsung and Apple products are priced between Rs 40,000 and Rs 60,000. As we compete with the best global brands, we thought somewhere in between is where we can have a good position. That is why we priced our tPhone at Rs 22,000.