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India’s Micromax struggling Now

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A worker displays a Micromax mobile phone inside a store in Kolkata in this December 4, 2013 file photo. REUTERS/Rupak De Chowdhuri/Files

At a time when PM Modi is emphasizing on ‘Make in India’, India’s Micromax is struggling to survive and expand in the smartphone market.

By Himank Sharma

MUMBAI (Reuters) – A year ago, Micromax vaulted past Samsung Electronics Co Ltd to become India’s leading smartphone brand. Today, its market share has nearly halved, several top executives have resigned, and the company is looking for growth outside India.

In Micromax’s slide to second place is a tale of the promise and peril of India’s booming but hyper-competitive smartphone industry.

India is the world’s fastest-growing smartphone market. Shipments of smartphones jumped 29 percent to 103 million units last year.

Rapid growth has helped nurture a crop of local brands, led by Micromax, that outsourced production to Chinese manufacturers. Now, as Samsung rolls out more affordable phones, the same Chinese factories are entering the Indian market with their own brands, depressing prices and forcing Indian mobile makers to rethink their strategies.

“What the Indian brands did to the global brands two years ago, Chinese phone makers are doing the same to Indian brands now, and over the next year we see tremendous competition for Micromax and other Indian smartphone makers,” said Tarun Pathak, analyst at Counterpoint Research in New Delhi.

Micromax mobile phones are displayed at a mobile store in Mumbai in this December 4, 2013 file photo. REUTERS/Danish Siddiqui/Files
Micromax mobile phones are displayed at a mobile store in Mumbai in this December 4, 2013 file photo. REUTERS/Danish Siddiqui/Files

MANAGEMENT TENSIONS

Micromax, which was founded in New Delhi by four partners in 2000 but only began selling mobile phones in 2008, built its market share by working with Chinese manufacturers such as Coolpad, Gionee and Oppo to offer affordable phones quickly. In 2015, it launched more than 40 new models.

In 2014, the founders brought in outside managers to lead the company at a time when Micromax was challenging Samsung to become the largest mobile phone maker in India.

But tensions arose soon after between founders and the newly hired executives, six former executives told Reuters. These conflicts undermined Micromax’s attempts to raise funds for expansion, say former executives. Last May, Alibaba walked away from a mooted $1.2 billion purchase of a 20 percent stake, citing a lack of clarity on growth plans, according to one executive involved in the discussion. Micromax co-founder Vikas Jain said in an interview with Reuters this week that the company and Alibaba disagreed on a future road map.

Alibaba declined to comment.

Former executives said the lack of fresh funding undermined a proposal by the new executives to move Micromax’s research and design operations, which had previously been outsourced, in-house. The move was intended to help Micromax differentiate itself from generic Android clones.

“We hired about 80-90 people in Bangalore to do in-house software and design, but with no money from the investors and little interest from the founders, that team fizzled away and that office has been partially shut down now,” said a former executive.

After Alibaba walked away, Micromax struggled to attract other investors who would have been key to Micromax’s plan to invest in software R&D and hardware design. The company was forced to scale down the in-house R&D project, a top executive involved in the fundraising plan said.

At least five senior executives have resigned since November. The latest was Vineet Taneja, chief executive since 2014, who quit last week.

“THE WHOLE INDUSTRY IS SUFFERING”

Meanwhile, Chinese handset makers, including Coolpad and Oppo, to which Micromax outsources its manufacturing, were sharpening their focus on India. Samsung, too, began to introduce more affordable models there.

In 2015, Chinese brands doubled their market share to 18 percent, according to Counterpoint Research, taking away business from Indian budget phone makers such as Micromax, Intex, Lava and Karbonn. Indian brands’ market share fell from 48 to 43 percent last year.

“Right now the whole industry is suffering because of the Chinese phones,” Jain told Reuters. “We have seen large write-downs happening on inventory in China, and that inventory is being passed on to India at a markdown.”

Chinese phone makers including LeEco, Xiaomi and Lenovo have also partnered with e-commerce companies including Amazon India and Flipkart to sell phones directly to consumers, saving on distribution and sales and reaching new online shoppers directly.

In the final quarter of 2015, Micromax’s shipments fell by 12.1 percent, against growth of 15.4 percent for the sector, according to industry tracker IDC. Micromax’s share of the smartphone market fell to 13 percent in the fourth quarter from 22 percent at its peak in 2014, according to IDC.

Micromax, which is privately held and does not disclose financial information, maintains it is profitable. Founders Jain, Rahul Sharma, Rajesh Agarwal and Sumeet Arora still control about 80 percent of the company. They have raised nearly $90 million from investors in the last five years.

Facing competition from both Samsung and inexpensive Chinese phones, Micromax plans to increase production in India. Jain said that the company plans to double local manufacturing output from 1.5 million units to about 3 million units a month over the next six to 12 months.

Already a top-10 brand in Russia, Micromax is seeking a partner to help it expand further outside India and diversify into televisions and tablets.

“Micromax needs to diversify geographically and also needs to diversify product lines,” said Neil Mawston, executive director of the global wireless practice at London-based research consultancy Strategy Analytics. How well it manages that diversification, Mawston says, will be key.

(Reporting by Himank Sharma; additional reporting by Paul Carsten; Editing by Alexandra Harney)

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Smartphones Using Artificial Intelligence Can Predict User’s Mental Well-Being

At the University of Illinois' Chicago campus, researchers are using crowdsourcing to test their experimental phone app.

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Students, smartphones
Students walk across a campus in Portland, Oregon. VOA

Could the devices being blamed for teen depression be useful in revealing it?

Studies have linked heavy smartphone use with worsening teen mental health. But as teens spend time on sites like Instagram, Snapchat and YouTube, they also leave digital trails that may offer signs about their mental well-being.

Experts say possible warning signs include changes in writing speed, voice quality, word choice and how often a student stays home from school.

There are more than 1,000 smartphone “biomarkers,” said Dr. Thomas Insel, former head of the National Institute of Mental Health, which is the largest mental health research organization in the world. Insel is a leader in the smartphone psychiatry movement.

Snapchat, smartphones
An image of the Snapchat logo created with Post-it notes is seen in lower Manhattan, New York, May 18, 2016. VOA

Researchers are testing smartphone apps that use artificial intelligence, or AI, to predict depression and possible self-harm. Using smartphones as mental health detectors require permission from users to download an app, and permission could be revoked any time.

Nick Allen, a psychologist at the University of Oregon, has created an app being tested on young people who have attempted suicide. Allen says the biggest barrier is discerning the mental health crisis signals in the information on people’s phones.

Suicide is the second leading cause of death for people between the ages of 10 and 34 in the United States. By 2015, suicide rates among teen boys rose to 14 in every 100,000 and five in every 100,000 people, among girls. A recent study suggested a rise in smartphone use has probably worsened the crisis.

People with mental illness, Insel said, usually get treatment “when they’re in crisis and very late. … We want to have a method to identify the earliest signs.”

Smartphones
iPhones on display at an Apple store in Virginia, USA, April 4, 2016. VOA

If smartphones can become effective predictors, app developers say the goal might be to offer automated text messages and links to assistance, or digital messages to parents, doctors and first responders.

Facebook employs “proactive detection.” Last year, after a suicide was broadcast on Facebook Live, the company trained its AI systems to look for words in online posts that could predict possible self-harm. Friends’ comments expressing concern about the user’s well-being are part of that detection system.

Facebook has helped first responders quickly reach around 3,500 people in the past year. But the company did not offer followup details on those people.

Ongoing research includes a Stanford University study of about 200 teens. Many of them are at risk for depression because of bullying, family issues or other problems. Teens who have been studied since grade school get an experimental phone app that asks them questions about their mood three times a day for two weeks.

Students, smartphones
In this Feb. 26, 2015, file photo, a UCLA campus tour guide leads prospective college-bound high school seniors on a campus tour in Los Angeles. VOA

Laurel Foster, 15, is part of the study. Foster said she is stressed about school and friendships. Depression is common at her San Francisco high school, she said. The smartphone app felt a little like being spied on, she said, but many websites are already following users’ behaviors.

Alyssa Lizarraga, 19, is also part of the study. Lizarraga said she has had depression since high school, and worries about her heavy use of smartphones and social media. She said comparing herself with others online sometimes causes her sadness. But she believes using smartphones to identify mental health problems might help push people to seek early treatment.

At the University of California, Los Angeles, researchers offer online counseling and an experimental phone app to students who show signs of at least minor depression on a test. It is part of a larger effort launched in 2017 by the university to battle depression in its students. About 250 UCLA students agreed to use the app during their first year.

Also Read: Depression In Girls Linked To Higher Use Of Social Media: Study

At the University of Illinois’ Chicago campus, researchers are using crowdsourcing to test their experimental phone app. Nearly 2,000 people have downloaded the app and agreed to let researchers follow typing behaviors. Alex Leow, a professor of psychiatry and bioengineering at the university, helped develop the app.

The study is for people 18 and older, but Leow said it could also be used for children if successful.

Along with studies at universities, technology companies such as Mindstrong and Verily — the tech health division of Google — are testing their own experimental apps. (VOA)