As the popularity of floppy disks waned, Amkette moved into new areas of digital entertainment
Year 2007 was perhaps one of the first years when the tell-tale signs of the death of the floppy were writ large; at least, in India. Desktops here – in sync with the global trends – had started leaving out the floppy drives. Assembled PC-makers charged additional Rs 400-500 (around $10-12) for installing the floppy drives.
And for Amkette it was the year when they moved away from their core business – floppies – to computer peripherals and flash storage devices (pen drives).
“Our first wireless keyboards, mouse and pen drives apart from the floppy disks were released in the market in 2007,” Rajiv Bapna, Director, Amkette told eWorld.
And from then on, the focus has been on “innovative offerings” that focussed on digital lifestyle solutions.
The journey of the company, as Bapna describes, has been “from a leader of personal storage” to “leadership in personal technology”, or, from a floppy maker to providing digital lifestyle solutions.
By 2009, two years after its first foray into what was then a brand extension exercise, multimedia products that included flash TVs (which allowed hard-disks to be connected to television sets) were launched; making clear the transition into the niche of personal technology.
“The transition has been by choice and not because of compulsion. The change has been a smooth one for us,” Bapna claims.
Personal storage ‘leaders’
Delhi-headquartered Amkette, established in 1986, had been one of the few home-grown players in the floppy diskette segment; particularly the3.5 inch floppy space.
With a turnover of nearly Rs 300 crore in the 2000s (banking primarily of floppy sales); Amkette challenged the dominance of global majors like Sony or TDK both in India and abroad.
“We had established a leadership position in terms of volume sales,” Bapna recalls.
The floppy with a mere 1.44 MB storage space was one of the first external storage devices that dominated the market for nearly four decades (beginning 1960s). Early day CDs were not in their present rewritable formats nor were pen-drives in existence. The death knell for floppies began in 1998 with Apple’s iMac G3. The PC had something new called the ‘USB’ and the one thing it left out was the floppy disk.
At the time, many believed Apple was out of its mind. Soon other PC-makers followed suit. By 2003, Dell and other PC-makers had dropped the floppy disk drives too.
Emerging markets like India, however, kept the floppy disk alive. But its death was foretold once CDs came at throwaway prices.
“Technology changed and we started diversifying our offerings,” Bapna adds.
The change in fortunes for the company was evident. As the popularity of floppies weaned, Amkette’s turnover too slid from an enviable Rs 300 crore (in the early 2000s) to around Rs 80 crore (at present).
Bapna does not recall the worst year for the company and insists that Amkette has never been in red so far. Neither is he worried about dipping turnovers.
“We don’t play the numbers game. We’ve established a brand and our offerings are well accepted in the market,” he adds.
Accordingly, Amkette decided to close its Udaipur (Rajasthan) floppy-manufacturing facility as late as in 2013; after its last batch of floppies (around 120,000) were shipped.
The facility will now be used as a research and development unit (R&D) and India logistics centre.
The business now has been categorised into wireless solutions, personal technology and audio, peripherals and multimedia.
Apart from wireless keyboards and mouse, the new products introduced include Bluetooth-enabled headsets (for calls and music), keyboards for iPads and its new flagship product; the EvoTV (a smart device based on Google’s Android operating system that integrates the Internet and web features into TV).
Acoustics is another area where the company is carrying out research as its future revenue garner. Around Rs 15 crore has been spent in developing a lab and by March the audio section will come full steam.
“We launched the first version of our EvoTV in June 2012 and a second edition in January this year,” Bapna maintains adding that audio and multimedia remain the other core areas for the company.
With manufacturing facilities in Shenzhen (China), hardware testing is done in Delhi. The company has its research and development wings in Bangalore and Udaipur and has earmarked 7 per cent of its turnover ( Rs 6-7 crore) for R&D spends.
“Most of our products are designed and tested in-house,” he added.
Bapna knows that innovative products need to be spring-boarded by strong marketing and after sales service. Ramping up presence across the country, he admits, is the key.
Backed by a “strong” distribution network (of 500 plus distributors) in 110 cities; the company is on the look out for more. The new distributors will help Amkette gain a stronger foothold in the B and C towns – perhaps the biggest growth drivers in the days to come. It also has 22 standalone Amkette stores while customer touch-points are there in 34 cities. Plans are afoot to increase the customer touch-points to around 45 by the end of this year (2013).
The big bet for Amkette is now its EvoTV. Large format retail stores (like a Reliance World or eZone) have shown interest in it and the company is setting up ‘experience zones’ (shop-in-shop formats).
Technology changes and time moves on. Perhaps it’s time that we walk into a store looking for that Amkette EvoTV rather than the floppy.