Bottoms Up: Is Micromax Going to War With A Kitchen Knife?


Bottoms Up: Is Micromax Going to War With A Kitchen Knife?

Hiring a Hollywood star as a brand ambassador is one thing. Going to a war with a kitchen knife is quite another. Truth be told, the world is a sad place for a handset company right now.

Yesterday, homegrown cellphone company Micromax announced that Hugh Jackman will be the face of Micromax. A few scholarly articles pointed to the company’s global ambitions. That is a patently silly assumption to make.

The problem with Micromax is simple. Patents. Almost all of the technology used in todays smartphones are patented by giant corporations like Apple, Nokia, Ericsson, Hewlett Packard and Google. When Micromax sets foot on foreign shores it will be something like this.Soldier Suicide

Or this.

Captain Jack Sparrow

Remember, Captain Jack Sparrow had uncanny abilities, a magical compass and forgiving friends to beat his dreaded brethren to the gold. Micromax, is not in that movie. Patent wars around the world and specifically in the United States, are dreadful and have ugly consequences.

Patents don’t come cheap. You can put in years of research or throw big bucks at dying companies to pick up a few. As this Reuters article points out, HP paid about $750,000 each for over 1600 patents from Palm. Google paid over $500,000 for Motorola Mobility’s 17,000 patents. Bankrupt Nortel sold over 6000 patents for $4.5 billion to Apple, Microsoft and others. The going rate for BlackBerry is $4.7 bn. Does Micromax have that kind of money?

In India, Micromax has already been sued by Ericsson for infringing key patents. Last we heard, Micromax was asked to pay 1.25- 2% royalties to Ericsson on each sale. More royalties will push prices up.

The company also has more immediate problems to deal with. Like finding a new Chief Executive Officer or putting an end to the bad press from the recent arrest of its co-founder for allegedly bribing a government official.

Here’s another question that comes to mind. You know, poor scribes like me will use their phone. Will Hugh Jackman use one ever?

Image credit: Shutterstock.

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