MindTree enters mobile phone biz

In what can be viewed as a big shift in its business, mid-tier information technology (IT) solutions company MindTree Ltd on Monday announced that it has entered the business of developing ready-to-brand (R2B) mobile handset products with the recent acquisition of Kyocera Wireless India (KWI).

What the company is doing under the new business model is offering end-to-end services - from conceptualising to defining, designing and delivering a product - to telecom customers consisting of service providers and original equipment manufacturers (OEM).
In short, MindTree will now go beyond product conceptualisation and design services and offer even contract manufacturing through its network of electronic manufacturing service (EMS) providers to customers in the telecom vertical.

“Our engagement with the customer will be restricted to just services. If a customer wants, we will even take the ownership of the contract manufacturing of handsets. Kyocera has a developed ecosystem, which will facilitate this,” said S Janakiraman, president and group CEO product engineering services of MindTree.
  
The new business, which is called next in mobility (N!Mo),  would be the seventh growth engine of the company to reach its revenue target of $1 billion by 2014. The other growth engines of the company are IT services, R&D services, software product services, independent testing, knowledge services and infrastructure management and offshore technical support services (IMTS).

Ashok Soota, chairman of MindTree, said those businesses which would contribute over 10% of the $1 billion revenue by 2014 have been categorised as business growth engines.  He said N!Mo, which would be part of the MindTree’s product engineering services (PES), had that kind of revenue potential.

Krishna Kumar Natarajan, CEO and managing director of MindTree, said with the new business the company is taking a big leap in the non-linear model where the focus would be on developing products and intellectual properties (IPs) rather than just providing services.

Samartha Raghavan Nagabushanam, president and CEO of MindTree’s product engineering services group, said even though the KWI’s intellectual properties (IPs) were not part of the acquisition deal, the buyout has brought in capabilities to develop products. The Kyocera team has delivered 45 million wireless phones and has extensive experience in 4G technologies such as WiMax and Long Term Evolution (LTE).

“We are going to develop high performance IPs and that is what we are going to sell to the customers,” he said. 

Soota said it would take 12 months to rollout the products developed by MindTree into the market.

The newly set up business has enabled the company to offer feature-rich white labelled mobile handsets to its customers, who can just put their brand on device and take it to the market.

Nagabushanam said the new business will enable MindTree to move away from licensing model to recurring revenue model and bundle service with product.