Consumer Tech in Egypt | Retail

Most of the discussion that I read here in the US about technology developments in emerging markets focus on product and price. OLPC is the classic example in this regard...a product that designed to be inexpensive and simple enough that every child in the world ultimately has access to one. Microsoft's Windows Starter Edition fits the mold, as do Nokia's efforts to create products targeted to these markets.

However, before one can talk about product or price, the question of distribution needs to be addressed ("placement" if we are sticking with the Ps, although that word has always felt inadequate).

In markets like Egypt, the lack of quality retailers has long been a barrier to the growth of consumer technology spend. While the well-traveled buyer could pickup their gadgets on a trip overseas, everyone else was stuck paying too high a price for outmoded and poorly supported products. This is changing, and the emerging retail landscape is a great predictor of the ways in which consumer tech is moving.

The leaders in Egypt are the mobile carriers themselves. Companies like Mobinil have made serious investments in the customer experience of their retail locations. The staff is extremely well-informed, the stores are beautiful and the service level is best-in-class. When you walk in the store a host helps to direct you to the right area or person. The products are clearly displayed and the signage around their features is clear and extremely helpful. I would put the retail experience of the Mobinil and Vodaphone stores up there with a AT&T or Verizon store here in New York. The pictures I've posted will help to visualize some of this.

New-comer Etisalat has looked to jumpstart its market entry through a deal with Egypt Post.

However while those in the market for a mobile phone have a number of good options, anyone looking for computer hardware, software or accessories, including digital cameras, will need to work a bit harder.

The main retailers are small "mom & pops" with very little selection. These can be found throughout Cairo, and particularly in a couple of large flea-market-like malls with aggregations of small stores and stalls.

The major retail trend, which mirrors the rise of suburban developments outside of Cairo, are the huge malls on the outskirts of the city. These massive retail centers, offer everything imaginable, including large selections of consumer technology and electronics. Interestingly the largest of these is the local branch of the Virgin Megastore.

(NB: I have focused on what I was able to observe with physical retailers. I am less sure about direct retailers such as Dell and Apple. Dell does have a Middle East ecommerce site, but I cant say much about it.)

In order for people to spend money, they need access to reputable merchants whom they trust to provide quality, up-to-date products at reasonable prices. From what I saw during this last trip, the mobile carriers are the ones to beat in Egypt.

Posted by Michael Megalli on June 5, 2008 in Technology, Telecom | Permalink | Comments (1) | TrackBack


Who Keeps the Motorola Brand?

Big news day for Motorola with the announcement by CEO Greg Brown that they would be splitting off the company's mobile handset business. As we have covered before, this news the latest in a series of shake-ups, mix-ups and screw-ups that have dropped the tech giant to a shaky 3rd in the market for cellular handsets.

Brand issues often arise in M&A situations where the merged entity has to weigh the market equities and decide whether to keep one of the pre-existing brands or create a new one. This process is often fraught with emotion as loyalists on both sides make claims as to their brand's predominance.

Motorola's breakup brings the company face-to-face with a corollary challenge: which of the two emerging companies gets the Motorola brand and how is the other company branded? In the early part of the decade, Accenture and BearingPoint brands were born out of similar splits. Freescale Semiconductor was created in 2004 after the spin off of Motorola's semiconductor business.

It seems fairly clear that the handset business needs the brand more than does the  set-top box/modems side of the house. At the same time, neither side can afford to lose any advantages.

As it splits, Motorola will need to think creatively about how it maximizes the brand assets it has. One possibility would be to use the "Moto" brand -- a cornerstone of the handset advertising campaign and a recognizable brand in its own right -- as the new handset brand. This raises questions about global applicability of the Moto brand, and yet desperate times call for desperate measures.

Of course these are also emotional times at Motorola. Senior management is going to have to keep a cool head and get some good counsel.

Posted by Michael Megalli on March 26, 2008 in Branding, Technology, Telecom | Permalink | Comments (1) | TrackBack



Yesterday Motorola released disappointing earnings news and saw its stock drop to 2003 levels. The precipitous declines are being blamed on weakness in the company's mobile handset portfolio and the strengthening of competitive pressure from stalwarts like Nokia and newcomers like Apple.

And yet, competitive pressures notwithstanding, it seems that Motorola is its own worst enemy. Since 2003 when the company launched the enormously successful RAZR phone, its been in a kind of paralysis. Motorola, it seems, is allergic to success.

We've seen this before from Moto. Remember the StarTAC? Motorola's innovative, and chicly diminutive, clamshell phone which won high marks for its stylish design and quickly became a high tech status symbol? As you might recall, Motorola sold a lot of StarTACs in the years following its 1996 release--so many in fact that it became incapable of imagining a post-StarTAC world.

Well, history is repeating itself. This time around Motorola has released alternatives to the RAZR, but it has RAZR'ed them all to death. Looking through the company's phone portfolio, one can't help feeling like a dyslexic kid during finals week: RAZR, ROKR, KRZR, SLVR, RIZR. Is it a product naming convention or a cruel joke? This is not to mention the vagaries of the sub-brand modifiers; V3i, V3xx 3G, Z6tv, etc.

Clearly Motorola needs to come up with some radically new phone designs if it is going to remain a serious competitor in the tough neighborhood of Apple, Nokia, Samsung, HTC, LG, Sony Ericsson. But it needs to do something else. It needs to realize the consumers are under a siege of choice. They don't have the time, energy or interest in unpacking an impenetrable, highly-coded product portfolio in order to feel assured that they are getting the product that best meets their needs.

Posted by Michael Megalli on January 24, 2008 in Product portfolios, Telecom | Permalink | Comments (1) | TrackBack


Marketing Implications of an Open Verizon

Today's poorly reported USA Today article on AT&T "flinging open" its network (effective immediately) is a sign of the wireless times. The article/announcement/PR coup follows recent news from Verizon Wireless that it would both open its wireless network to "any app, any device" and that it would embrace Google's Android platform.

Google couldn't have hoped for more frenzied carrier responses to Android and the Open Handset Alliance.

Whatever the validity of AT&T's claims in USA Today, the Verizon announcement remains the more interesting and potentially transformative of the two. While the pundits are right to be cynical --predicting that this is either a ploy to conjure some goodwill before next month's 700 MHz auction, to gain an edge for the lonely CDMA standard or to simply dupe the market--Verizon's announcement is on record. They will have to do something to demonstrably change the way they do buisness and open the gates to their prized network.

From a marketer's perspective, there are 3 major implications and opportunities:

1. Verizon will need to become an endorser brand.

No more "Can you hear me now?" advertising, Verizon will need to extend its "network excellence" positioning as a driver market innovation. The challenge for Verizon will be to use its brand to endorse these innovations rather than trying to create them from scratch and own them outright.

VCAST's MTV/Rhapsody deal, while a little late, will be the shape of things to come. Like any good idea, timing is they major success factor. Verizon should bring back the MVNO model but with a stronger role for its brand in endorsing private label products and services. Some potential cost-savings here as Verizon can rely on partners to shoulder more of the marketing costs.

2. Fix (or kill) retail.

Verizon's retail experience is broken. Until now, this has not mattered because all the carriers have terrible retail experiences. However, if Verizon is going to send a clear signal to the market that they are offering something better nothing will be more important than retail. At the very least, they will need to devise a strategy for including a wider range of partners in their retail stores; effectively turning them into malls of products and services. If this is too much to pull off, Verizon should re-think its channel strategy entirely and enlist new channel partners who can do what is needed.

3. Let the market define itself.

Marketers all share a nervous tick: the need to constantly do enough research to draw an accurate picture of the market. If Verizon's marketers attempt to do this, they will drive themselves mad. Unlike the days of the 7 o'clock news, today's market is only what it says it is. Part of being open is being willing to give over control. This is as true for marketing as it is for anything else. Give people as much (or as little) choice as they want and let them create their own value props.

Additionally Verizon will need to address both its pricing model and its relationship with handset manufacturers. In the case pricing, things are going to have to become a lot simpler and more transparent (and cheaper too). In the second, Verizon will need to have its own line of private label (or semi-private label) devices based on innovative handsets. To do so it should look to build strong relationships with manufacturers a la AT&T's relationship with HTC. Seems like LG would make the most sense here.

Posted by Michael Megalli on December 6, 2007 in Branding, News, Telecom | Permalink | Comments (0) | TrackBack


Commoditizing Themselves

Imag0016 The telcos are nothing if not consistently self-destructive. Imagine the luxury of having 60 million subscribers without any real alternative to your service. It's easy to think that in the day-to-day grind of watching the money roll in, one might forget that those people dealing with your call center or waiting in Soviet-era lines in your retail stores did not actually work for you but were your customers.

This evening I accompanied my wife on a trip to the Verizon Wireless store near our house. Her situation will be familiar to anyone who has done business with an American wireless provider: broken handset, 6 months left on contract. Its not a powerful position to find oneself in. Granted, she spends $100/month on service with Verizon, but this is clearly not enough of an incentive for the company or its well-staffed 6,000 sq ft suburban NY store to be able to help her within 40 minutes of our arrival and registration.

As I recently wrote, the telcos are on the brink of a self-inflicted brand crisis. They spend billions of dollars a year on ads pushing the commodity features of their networks (AT&T, reach; Verizon, call quality; Sprint, speed) while letting their brand bleed out in everyday interactions with existing and prospective customers.

Posted by Michael Megalli on November 19, 2007 in Telecom | Permalink | Comments (1)