NEWS: Staying afloat using effective strategies

AS recession bites, the effects are beginning to show in many segments of the ICT industry. The client PC segment of Asia-Pacific (excluding Japan), for example, fell 14 per cent sequentially and five per cent year-on-year to reach 17.2 million units in the fourth quarter of last year, according to preliminary results by International Data Corp. This was the first year-on-year decline in the region since the third quarter of 1998 when the region was suffering from the Asian financial crisis.
A Lenovo Ideapad netbook is shown. During the economic slump, ICT players in the affected markets will have to come up with the right business strategies to remain viable.
A Lenovo Ideapad netbook is shown. During the economic slump, ICT players in the affected markets will have to come up with the right business strategies to remain viable.

The outlook is also not that rosy in the worldwide mobile phone market. Although it is predicted that there will be growth this year, it will be very much reduced. Mobile phone sales are expected to decline as consumers, hurt by the economic meltdown, cut down on spending.

Analysts reckon global mobile phone sales are expected to fall between five and 12 per cent this year compared with last year.

In tougher market conditions, players in the affected market segments will have to come up with more effective strategies to remain viable. One effective way is to probably employ a no-frills business model, which have proven quite successful among budget airlines, to cut down on costs.

In the PC market, we are seeing a growing number of manufacturers introducing new products that are cheaper, but with less functionalities and other frills. The netbook is one good example.

Compared with a notebook, the netbook is much cheaper. Although it has limited storage capacity and processing power, users are finding the netbook a good buy. If given a choice, many consumers it seem, would prefer tech products that are cheaper rather than more powerful.

Some tech players are also moving into new areas to help grow revenues amid tough competition, such as what is happening in the mobile phone market.

Observers are seeing more mobile phone giants going beyond their traditional role as handset makers by offering entertainment and lifestyle content.

According to market research firm Ovum, bundling content and services into the handsets is dictated by industry trends, as handphones come with more processing power and wireless connection becomes more widespread.

Mobile phone makers have also come up with different business models on how to package content.

Sony Ericsson, for example, has launched a new service called PlayNow Kiosk, which allows its handphone users in the Asia-Pacific region to download the latest movies, television series, games and music from its retail stores.

Another mobile phone giant Nokia has already launched its Ovi Suite, an “umbrella concept” that allows users to share photos, buy music and access third-party services, such as Yahoo’s Flickr photo site, among others.

It is true that many tech giants have survived and even thrived under the harshest conditions.

Constant innovation and improvement, and employing the right business strategies differentiate them from other lesser players.