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INTARTIC: RIDING THE IoT WAVE TO A SERVICE MODEL
ANSHUMAN TRIPATHY, PRANAV GUGLANI AND ABHIJIT S PULIMOOTIL
Professor Anshuman Tripathy, Professor of Production and Operations Management, and MBA students Pranav Guglani and
Abhijit S Pulimootil prepared this case for class discussion. This case is not intended to serve as an endorsement, source of
primary data, or to show effective or inefficient handling of decision or business processes.
Copyright © 2020 by the Indian Institute of Management Bangalore. No part of the publication may be reproduced or
transmitted in any form or by any means – electronic, mechanical, photocopying, recording, or otherwise (including internet) –
without the permission of Indian Institute of Management Bangalore.
This document is authorized for use only in Carlos Osorio's IT management 38 at ESAN - Graduate School of Business from Sep 2023 to Oct 2023.
Intartic: Riding the IoT Wave to a Service Model
The unprecedented outbreak of the novel Coronavirus (COVID-19) in late 2019 had already spread to more than
190 countries and infected close to 6 million people worldwide by the end of May 2020. A global pandemic that
brought the world to a standstill had pushed people to the confines of their homes as a part of nationwide
lockdowns and restrictions to curb the spread. Ramashish Ray, a co-founder of Intartic and RMS Sg PTE, was at his
Gurgaon residence during the lockdown, attending to business as he and his team were preparing for the launch of
their new IoT1-based smartwatch for children.
Intartic was founded by Ray and Lu Chen, his colleague from Nokia days in 2015. Ray envisioned to create an
enterprise that could leverage technology to solve the problems faced by the society. His tenure at Nokia, where
he had spent half of his work life, greatly influenced this outlook. He further wished his company to be modeled
along the cultural values he had observed at Nokia, where mutual respect and innovation were promoted. Intartic
began as a technology consulting firm and had over time grown into an indigenous mobile accessories brand.
Despite the mobile accessories market being crowded and commoditized, Intartic was able to realize exponential
growth in revenue and profit over a period of 4 years. However, in 2020, Intartic was at the threshold of a new
business. With the launch of the children’s smartwatch, they were vying to enter the space of smart wearables.
The segment was not bereft of competition or established brands, but Intartic believed they had a shot at
establishing themselves with their value proposition centered on personal safety and health. If successful, Intartic
planned to segue into the service business of developing Software IP for a connected ecosystem across wearables,
connected homes, and connected automobiles focused on safety and health.
The idea of a relatively smaller brand like Intartic venturing into the smart wearables segment, which was
competitive and replete with established brands, could be up for debate. While Ray was aware of the risks, he was
convinced of the potential of the safety ecosystem in India. He banked on a team of technology and
telecommunications industry veterans (Exhibit 1), their expertise, and channel knowledge to build a product for
the Indian consumers at a reasonable price point and of reliable quality. He reflected:
It’s a very large ambition but to do that technologically today with the supply chain, hardware and
software ecosystem is possible. There is a time window and a need window and if we are able to get the
funding and crack it, then I don’t see why the idea won’t work logically.
THE INDIAN MOBILE ACCESSORIES INDUSTRY
The Indian Mobile Accessories market comprises various product categories such as energy (chargers, power
banks, batteries), audio (earphones, speakers, headsets), protective cases, and memory cards, among others. The
accessory market was valued at over INR 75 billion2 in 2015-2016 with an anticipated CAGR of 10% over the next 8
years.3 The market was highly fragmented and comprised a multitude of foreign and local brands which included
mobile manufacturers such as Apple, Samsung, Xiaomi, white label resellers and OEMs, local manufacturers, and a
predominant grey market which made up 60-80% of the market. Factors such as the rapid penetration of the
mobile network and smartphones, availability of a wide variety of products at competitive prices, increasing
disposable income and rapid expansion of the accessory distribution network both online and offline had
contributed to the growth of the segment. As Puneet Gupta, the Business head of Oraimo Accessories India,
another local brand says:
Today, basic accessories have become must-own devices, and the mobile accessories market is growing at
a remarkable rate. Though the market is still largely fragmented and unorganized with grey, unbranded
1 Internet of Things (IoT), which defines a network of physical objects embedded with sensors, software and other tech that enable connection
and exchange of data between systems, In this case it applies to wearables that include watches and wristbands and their associated
applications.
2 Applying currency conversion rate of USD 1 = INR 75.2657 as of -May 28, 2020
3 https://www.researchnester.com/reports/india-mobile-phone-accessories-market-analysis-opportunity-outlook-2024/85 accessed on May
28, 2020
Page 2 of 16
sellers having a big share, the Indian Mobile accessories market will continue to offer opportunities for
branded players to survive and grow.4
Indian brands often had to compete with both branded and gray-market products from countries like China which
made it difficult for them to establish a differentiated brand in a price-sensitive market such as India. The lack of
standardization and competitive pricing had created tough market conditions for the local brands owing to low
switching costs for consumers. The short life cycle of the products necessitated rapid innovation and R&D which
further made it arduous for several brands to compete. Komal Agarwal, Marketing Director for Pebble, an Indian
accessory brand states:
The increasing clutter of regional brands and unbranded products in the market is affecting margins due
to extensive price wars. Secondly, it is also confusing the consumers on what is the right product to buy
when they see a ‘similar looking’ product varying in prices from Rs. 200 to 2000. 5
Certain accessory segments like audio, owing to the experience value, emerged stronger from the gray market
competition with Indian brands such as Boat and Zebronics being able to capture customer attention. The local
brands were counting on consumer awareness and building strong brands by providing innovative and reliable
products designed for the Indian consumer at reasonable prices to stay ahead of the stiff competition.
INTARTIC PVT. LIMITED
Ray had the idea of starting his own venture ever since his Nokia days. His vision was to establish a firm that would
provide technological solutions to existent problems in the Indian market. He realized the idea in 2015 along with
Chen with whom he had worked in Nokia, and they established RMS Pte SG headquartered in Singapore and its
Indian subsidiary, Intartic Pvt. Ltd. It started as a technology consulting firm providing advisory services to clients
such as McKinsey, Gionee, Motorola, and Lenovo on the go-to-market, market-entry, and merger strategy. In the
subsequent year, the team leveraged their industry and channel knowledge and client relations to venture into a
partnership with a Chinese mobile accessories brand, Rock, to supply branded accessories to OEMs like Microsoft
and Samsung. The trade partnership was running smoothly but the inherent risk in depending on a third party for
supply prompted them to look for opportunities in India. Initially, Intartic operated as the licensed brand partner
for Rock importing their products from China to be retailed in India. Subsequently, they set up an assembly plant in
Manesar, Haryana (India) in late 2016 to assemble and supply its branded mobile accessories like power banks,
charging cables, and earphones. In this process, their Chinese partner, Rock, provided support for assembly line
setup and employee training. Intartic made steady progress in the accessories business with a multi-channel
approach and developed strong relationships with e-commerce players like Flipkart, Amazon and Reliance, major
Indian OEMs, and also with offline retail channels (Exhibit 2 on Intartic’s Evolution).
Intartic’s product portfolio comprised an exhaustive range of mobile accessories including power banks, mobile
chargers and cables, headsets and audio devices, and protective cases. Among the categories, power banks and
audio made up most of the revenue wherein the local manufacturing and sourcing capabilities made them
competitive. Other categories such as chargers, cables, and protective cases saw much competition from OEMs
and mobile manufacturers who benefit from economies of scale (Exhibit 3).
Intartic, over the years, had evolved along the value chain for mobile accessories. The mobile accessories value
chain comprised seven major steps (Exhibit 4).
• Research & Development (R&D): Mobile accessories have a short life cycle of 3 to 6 months and updated
models are launched quite frequently. This necessitates investing in R&D and technology development to
provide the consumers with the latest offerings in a highly competitive and commoditized segment. Intartic
4 http://www.mobilityindia.com/indian-mobile-accessories-market-boom/ accessed on 28 May, 2020

5 http://www.mobilityindia.com/indian-mobile-accessories-market-boom/ accessed on 28 May, 2020
Page 3 of 16
had adopted a dual approach where it did part of the R&D inhouse and also depended on its partners from
China for technology improvements.
• Design: This stage comprises the design of the various hardware components such as ICs and packaging as per
the product architecture requirements. They are either outsourced or done inhouse by the manufacturers. At
Intartic, most of the design specifications were done inhouse.
• Components and Subassemblies: The electronic components and subassemblies vary with the product and
together they form a product-specific part. This stage is often referred to as “box-build” and it integrates the
various systems such as batteries, printed circuit boards (PCBs), integrated circuits (ICs), display, packaging,
and electrical connections that enable the accessory to perform its functions. These components are often
sourced from mature mass supply sources like China which provide a variety of options at low costs. Intartic
procured its components both locally and most of the electronic components were sourced from China.
• Assembly: This is the step where the various components are put together on an assembly line to make the
final product as per the product architecture. In its initial days as a trading partner, Intartic used to source
finished products from its Chinese partner brand Rock. Later, from early 2017, Intartic started assembling the
products at its Manesar plant to be retailed under its licensed brand name. Their indigenous setup enabled
them to provide improved after-sales services at a lower cost and the company recorded less than 0.5%
average returns for its products.
• Software/ User Interface (UI)/ User Experience (UX): Most of the functional mobile accessories are not heavily
dependent on software development. In many instances, the machine embed code for basic functionality is
sourced from aggregators in mature supply sources like China. As the mobile accessory market evolves to
accommodate more connected smart devices interfaced over apps, the versatility of software used is
expected to increase. Intartic did not develop any software for its accessories; and requirements if any were
fulfilled by sourcing from China.
• Sales and Marketing: Accessory sales happen over both the online as well as offline channels. In the offline
channel, they are often distributed along with mobile phones. The online channel sees both the alpha seller as
well as the marketplace model of sales mechanisms. Intartic adopted a multi-channel strategy over online and
offline to sell its products and online gradually gained precedence over the latter.
• Servicing: The extent of after-sales servicing and customer support depends on the type of product.
Depending on the value and shelf life of the products, it is quite common for them to be of use and throw
nature wherein the brand does not provide any warranty or service support. In the initial phase, Intartic used
to service the products by shipping them back to its Chinese partner. In 2020, they provided 100% local
servicing for the products (Exhibits 5 and 6 on Intartic’s Product and Value Chain Progress).
Retail Channels
Owing to strong channel relationships with online as well as offline partners, Intartic adopted a multi-channel sales
strategy, with each having it owns benefits and challenges (Exhibit 7).
• Offline: The offline channel includes mobile retail stores as well as independent accessory stores. Intartic used
to collaborate with mobile distributors as well as direct distribution to retail stores. Direct store distribution
yielded better margins though it led to longer turnaround time and credit cycles. The overall margins were
higher in the offline retailing at 22% to 25%. The offline mode also provided customers the benefit of touch
and feel experience which was vital in a market that had low differentiation.
• Online: Intartic had partnerships with both Flipkart and Amazon to sell accessories on their platform with
Flipkart being the first to onboard Intartic, followed by Amazon. Intartic had tried both the alpha seller as well
as the marketplace model to retail online. While the alpha seller model provides better inventory control and
marketing support, it raises challenges due to lack of consumer knowledge (such as buying behavior and
demographics) which is the proprietary of online sellers. Eventually, Intartic settled for the marketplace
model. The online route offered margins of 10% which used to fall as low as 5% during seasonal sales though
it ensured shorter credit cycles which were often half as that of the offline channels (Exhibit 8 – Intartic’s
Balance Sheet and Income Statement).
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Manufacturing for OEMs
Intartic’s 30,000 sq. ft assembly manufacturing unit was capable of producing up to 75,000 power banks and
100,000 chargers a month. The plant’s capacity exceeded the demand for Intartic’s own products. Hence, it was
decided to open up the plant for manufacturing for OEMs. Over the next 2 years, Intartic manufactured various
products for several OEMs including some leading Indian brands. Though the OEM setup offered better supply
chain visibility and production control, it took away Intartic’s control over design and the OEM also had substantial
bargaining power owing to the large volume it ordered. Besides, the margins available in OEM supply at 5% was
low as compared to the offline or online retailing. Notwithstanding this, OEM partnership offered Intartic the
opportunity to establish channel relationships and also assured capacity utilization and guaranteed volume. As a
result, as much as 80-90% of Intartic’s production capacity was dedicated to supply the OEM demands.
The arrangement exposed Intartic to several risks since a large share of Intartic’s manufacturing capacity was
dedicated to catering to a few OEMs creating a critical dependency. In the event an OEM broke ties with Intartic, it
would have been burdened with unutilized capacity, low working capital, and surplus inventory. They hit a
roadblock when one of Intartic’s Chinese component suppliers contracted directly with a major OEM partner
bringing Intartic’s dedicated supply chain to a halt. Having lost its biggest source of revenue and with unutilized
manufacturing capacity choking capital, the management decided to downsize the assembly plant to 10,000 sq. ft.
In the wake, they also decided to focus on building their own brand with a predominance to sales over the online
channel with limited capacity allocation for manufacturing for OEMs. It took Intartic nearly 6 months to recover
from the debacle. Meanwhile, the accessory market was getting increasingly crowded with both local and
international brands. Ray realized that it was the right time to venture into a new business that would provide him
the platform to realize his vision.
INTARTIC’S ROUTE TO SMART WEARABLE MARKET
Amid the challenges in the mobile accessories market, Intartic decided to venture into the IoT-based smart
wearables segment. In the new business, Intartic intended to target the latent need for individual safety and
address it with a wearable IoT-based device that would provide customized health and safety alerts. Intartic’s
rationale for targeting the safety wearable segment was that it was an untapped segment in India. As per the firm,
the existing products in the segment were centered around fitness as the primary offering and did not provide
intuitive safety support (Exhibit 9). The lack of an indigenous solution with software and UI/UX developed locally
for the Indian consumer was seen as an opportunity by the firm. Intartic was also looking forward to leveraging the
customer data it so collected to personalize the UX with its AWS AI platform. This potential to capture and process
data locally without loss to external entities was seen as a competitive advantage by the team.
Wearables “are smart electronic devices (electronic device with micro-controllers) that are worn close to and/or on
the surface of the skin, where they detect, analyze, and transmit information concerning e.g. body signals such as
vital signs, and/or ambient data and which allow in some cases immediate biofeedback to the wearer.6” The
wearable segment includes both wristbands and smartwatches. The market was led by brands like Apple, Xiaomi,
Samsung, Fitbit, Fossil, Huawei, and Garmin. The global wearables shipments increased at a CAGR of 50% from
~30M in 2014 to ~340M units in 2019.7 This growth was primarily driven by the increasing popularity of
smartwatches while the sales of smart wristbands were expected to stay steady or decline globally. Between 2018
and 2021, the smartwatch sales were expected to more than double from INR 933.3 billion (bn) to INR 2062.3 bn
while that of the smart wristband was anticipated to fall from INR 255.9 bn2 to INR 233.3 bn2,8. Together
smartwatches, wristbands, and sports watches accounted for 60% of the consumer spending on wearables
globally. The growing adoption of smartphones and internet penetration has led the significant rise in the
6 https://www.voiceflow.com/glossary/wearable-technology accessed on May 28, 2020

7 http://www.statista.com.iimb.remotexs.in/statistics/515634/wearables-shipments-worldwide-by-vendor/ accessed on June 2, 2020
8 http://www.statista.com.iimb.remotexs.in/chart/19954/consumer-spending-on-wearable-devices/ accessed on June 2, 2020
Page 5 of 16
consumption of these products. However, the availability of health apps on smartphones and increasing popularity
of smartwatches have been eating into the market share of wristbands.
Amid this stiff market competition, Intartic planned to enter the wristband segment with an IoT-enabled safety
watch for children. Intartic believed that safety comes as an afterthought for the average Indian consumer.
Understanding consumer behavior, they concluded that a safety product will need to be a part of the consumer’s
routine, which strengthened their belief to launch the wearable product. The basis of launching children’s watch
was not just a part of the blue-ocean strategy but was also driven by the leverage that Flipkart offered to the firm.
Per Intartic, Flipkart aimed to increase its gross merchandise value by launching the children’s watch segment and
with not many comparable offerings in the market. It was ready to act as an alpha seller for the firm, which not
only provided marketing support for Intartic but also promised to buy a minimum order quantity (MOQ), thus
reducing risks for the firm. Intartic believed that partnering with Flipkart would not only help them iron out the
product and process architecture based on the quick customer feedback but would also enable the team to make a
strong case for potential VC investments.
Intartic and the Indian IoT Market
Intartic considered that it was just the right time for investment in the indigenous IoT-based market. Its belief was
driven by key enablers which included India’s growing smartphone user base at nearly 500 million,9 shipments
growing at a rate of 8% YoY, and network providers such as Jio improving the 4G and fiber internet infrastructure.
The aforesaid along with government push for smart cities, Make in India, and data security initiatives had enabled
the creation of a robust digital IoT-based ecosystem in the domestic market.
The data security measures were considered to be a key ally by Intartic, as it believed that the control over data
would provide them with a competitive advantage in the crowded space. Analysis by Global Data reports also
suggested that:
Wearables collect significant amounts of personal data, which makes them targets for regulators.
Compelled by the EU’s General Data Protection Regulation (GDPR), wearable vendors like Strava, Fitbit,
Garmin, and Oculus have redesigned their privacy policies. Vendors with transparent data policies will
gain consumer trust and this will, in turn, drive sales of their devices. 10
Though the data privacy laws were relaxed in India, with rising consumer awareness along with stringent policies in
the pipeline, Intartic considered data security to be a potential game-changer for the local companies. Also, with
user penetration at 4.5% in 2019 in the fragmented wearables industry estimated at INR 108.8 bn,2 it saw growing
market potential. With expectations of the wearables market growing at a CAGR of nearly 6% from 2019–2023, it
believed that the industry would provide a perfect environment for an indigenous organization to take the share of
the pie.
If they were able to scale to 0.5 million –1 million devices in a span of 2 to 3 years, Intartic also planned to enter
the B2B space by developing Software IP for a connected ecosystem across wearables, connected homes, and
connected automobiles. It saw an opportunity in the Indian smart home market, which was estimated at INR 233.3
bn2 and was likely to grow at a CAGR of nearly 23% during 2019–2023 due to the developing fiber internet
infrastructure.11 With increasing disposable incomes, improved lifestyles, and growing need for consumer safety,
convenience, and security, Intartic expected the demand for IoT-based products to only increase. And with
virtually no barriers to entry, wherein even key Indian manufacturers were relying on white-labeling low-cost
imported products, it expected the competition only to increase.
9 https://www.news18.com/news/tech/smartphone-users-in-india-crossed-500-million-in-2019-states-report-2479529.html accessed on May

28, 2020
10 https://www.cxotoday.com/news-analysis/wearable-tech-is-maturing-not-yet-mainstream/ accessed on June 1, 2020
11 http://www.statista.com.iimb.remotexs.in/statistics/515634/wearables-shipments-worldwide-by-vendor/ accessed on June 2, 2020
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Delayed Launch for Children’s Wearable and Intartic’s Product Portfolio Pipeline
Just before the outbreak of COVID-19, Intartic was set to launch the children’s wearable but it was delayed due to
the lockdown. While COVID-19 led to lost sales for both the businesses of Intartic, the company expected that the
pandemic would potentially be a shot in the arm for the smart wearables market that it was targeting.
To differentiate its products in the fragmented and commoditized product market, Intartic had plans to focus on
safety, while offering the traditional health-related features such as heart rate, steps, and hours-slept tracking as
secondary benefits. After entering the market with children’s wearables, the team had decided to offer multiple
safety products for all consumer segments (adults, primarily women, and the elderly) with features such as
location and sound alert, audio record, image capture, and notification to self and community if anything was
amiss. Intartic was also working on offering low-cost wireless charging wearables to create a niche for itself in the
market; however, it was cash-strapped to invest in R&D. Ray anticipated that without funding of at least a million
dollars, of which 30% had to be invested in R&D on a continuous basis, the company’s plans to scale could come to
a standstill. Also, the sudden demise of a key member of the leadership team who had led the technical design and
architecture of products left Ray in a fix.
However, taking a leap of faith, Intartic decided to launch the children’s wearables in July 2020 and continue to
work on the development of products for the elderly. While the designs of products for the latter were not yet
finalized, the team was working on the feature that it planned to offer in all its future offerings, that is,
Personalized Safety Index (PSI). The safety index of each individual would be based on several standard factors
such as security, health, infrastructure, location, and travel; however, the relative importance of each of these
parameters would be personalized as per the user to have an individual index. With a promise of safety, the
company also planned to hardwire the SOS alarm to notify the Rakshaks (community, as Ray, calls them) in the
instance of an untoward situation. The aim to hardwire the notifications can be gauged from the fact when Ray
quips, “If everyone got a band then why are they not slimming down. They just switch off the alerts that they
don’t want.” With several such ideas, Intartic had filed patents for the design and PSIs that it was aiming to
develop.
Amid the vision to create a niche for themselves in the safety-related IoT space, Intartic was concerned about the
positioning of its products. Activity tracking for fitness was the most popular reason for the adoption of wearables
followed by weight control while diagnostics and managing vitals remained a distant fourth. To account for this
disparity, Intartic was planning to position the product primarily as a health band with safety as a secondary
feature.
It also planned to enter the B2B space via indigenously developed APIs and SaaS models. Though the founders
believed that it could be too soon to go to the drawing board and draft a detailed roadmap for the product, the
team had an overarching vision to diversify Intartic’s revenue streams through the B2B route. It not only planned
to offer its APIs to established firms in the mobile accessories market, but also had a roadmap to cut and slice the
data and make it useful for advertisers, health insurance companies, hospitals, and retailers. The idea of targeting
big brands to use its APIs would also add to Intartic’s consumer base, which would eventually provide them with
more data to improve their smart products. While Intartic had not hardcoded the architecture for this model, the
team saw growing potential in this space, which was largely untapped owing to low data ownership in India.
Intartic’s Value Chain and Organization Design
Unlike the mobile accessories business, Intartic had the vision to establish strong control over the value chain of
IoT-based products, especially over the UI/UX software design and user data. To gain a competitive advantage in
this market, the firm believed in keeping the products’ core architecture in-house while outsourcing the basic
coding to corporations depending on their competencies. However, due to its cash-crunch situation – which was
exacerbated by the decelerating economy in the pandemic – the firm decided to outsource this critical function of
software control to a trusted indigenous partner, Mobil80 Solutions and Services. Intartic considered that
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partnering with Mobil80 would not only allow Intartic to keep its leg in the race but also ensure desired customer
serviceability at a low cost. The lifelines of Mobil80 and Intartic were tied up with a robust NDA and a profit-
sharing agreement in the long run. Intartic was depending on potential venture capital/private equity funding to
bring this competency inhouse for which the founders had already started building an R&D team inhouse.
For procurement of standardized products, especially ICs and circuit designs, Intartic had decided to source them
from major supply sources such as China. In order to avoid dealing with multiple suppliers, Intartic had tied up with
aggregator suppliers (Tier 1 suppliers), who further controlled the independent Tier-2 suppliers in the local
markets. While it believed that the long-term relationships ensured supply chain continuity, the OEM loss made
the leadership more conscious. Intartic not just relied on contracts but also used the business prowess of one of its
co-founders from China to ensure continuity of business essential, in addition to creating mutual dependency using
tactical measures.
Also, the IoT-based products that Intartic was developing were largely experiential, as opposed to the functional
nature of mobile accessories – this change necessitated the way the organization was working. To understand the
consumer more closely and design products accordingly, the organization believed that it had to be more agile and
respond to consumer needs in the shortest possible time. Hence, Ray initiated the change and was in the process
of moving the organization from a functional-based structure to a team/project-based structure. He believed that
this would not only ensure that each team comprised people with multiple competencies but also make them
more adaptable and flexible. In some ways, it would also prevent the leadership from hiring experts for different
workstreams, thus reducing costs. Ray considered that this transition was easier said than done. Hitherto, it
involved aligning the senior management on the same model, coupled with organizing mentoring sessions by
leaders of the change management process. Amid COVID-19 lockdown, Ray also made it mandatory for the
employees to acquire the necessary skill sets to acclimatize to the dynamic business environment.
Retail Channel for Intartic’s IoT-based Products
Intartic decided to go completely online for its IoT-based products pipeline. It signed a contract with Flipkart,
wherein the latter would be the alpha seller for the organization. Later, the company had plans to transition to the
marketplace model with both Flipkart and Amazon. The marketplace model did not offer the benefits of marketing
and MOQ, as opposed to the alpha seller mode.
The company faced multiple challenges in the offline distribution in its mobile accessories business such as
extended credit cycles, low sale predictability, higher investments in marketing, branding and sales personnel, and
low investor visibility for which it opted to offload the physical retail distribution. Intartic also believed that the
traction for wearables would be largely online. According to a 2018 report,12 online channels accounted for nearly
80% of wearable sales in India, and the brands that primarily catered to mass consumers were likely to stay online
owing to low expenditure on marketing and better visibility on the demand. Expecting high investor visibility via
the online distribution and with reports suggesting that with rising concerns over health and safety in India, the
wearables market grew by 168% YoY to 14.9 million units in 2020,13 Ray was optimistic about the launch of
children’s wearables on Flipkart in July 2020.
THE WAY FORWARD
Intartic’s leadership was utilizing the lockdown period to restructure the organization, provide necessary training,
and reach out to potential investors. While they were all geared up and excited about the launch, the firm was
struggling to find answers to certain questions that were a cause for concern.
12 https://retail.economictimes.indiatimes.com/news/e-commerce/e-tailing/flipkart-bets-big-on-iot-powered-devices/63707191 accessed on
May 28, 2020
13 https://economictimes.indiatimes.com/news/economy/indicators/india-wearables-market-up-168-in-oct-dec-
idc/articleshow/74367716.cms?from=mdr accessed on May 28, 2020

Page 8 of 16
Intartic was actively looking for a potential replacement for Prabhakar who could provide leadership for the
architecture of all products in the pipeline. However, it did not have sufficient funds to hire someone for this
senior leadership role at market prices. Additionally, reading about the recent regulation of the Government of
India for online selling platforms, wherein Flipkart and Amazon had to gradually do away with exclusive
arrangements, Ray also appreciated the challenges of shifting from alpha seller to a marketplace model. This left
him in a quagmire if he should explore the offline retail channel as well. Intartic was also concerned about its
products’ market positioning. The firm was apprehensive of losing the market to established mass-market
competitors such as Xiaomi and Fitbit if they positioned their products as daily-use devices with health tracking as
the primary benefit and safety as a secondary feature.
Ray and the team had their tasks cut out for them. The challenges posed by the segment were numerous and
securing VC funding amid an impending global recession in the wake of the COVID-19 pandemic was in itself
arduous. A wrong decision could very well force Intartic to shut shop and bring Ray’s dream of building an INR 10
bn company in the next 3–4 years to a standstill. As he jumped from one call to another doing his best to run a
company from the confines of his home, he and his team were determined to march ahead with the plans driven
by his vision to realize the opportunity presented by the segment.
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Exhibit 1
Leadership Team at Intartic
Leadership Team Current Role Previous Experience
Ramashish Ray Founder & CEO Global Sales VP Samsung; Nokia/

Philips
Lu Chen Co-founder Nokia and Capgemini: BD and
analyst
Paul Savio COO Nokia/ Airtel sales and BD
Ajay Sharma Sales & BD Sony and Amkette
Leong Yoong Tech Advisor Nokia, Xperi, Dolby
Pankaj Prabhakar (deceased) Design, R&D Nokia, Samsung & HP PM
Sanjay Pal -- Intex: R&D and sourcing, Service

head – Samsung
Source: Company Documents
Exhibit 2
Intartic’s Evolution
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Exhibit 3
Product Category Wise Share of Sales Revenue
Page 11 of 16
Exhibit 4
Consumer Electronics Value Chain
Online, Offline
Sales/ Service
Distribution/
B2B, B2C,
NPD
Final Product
Consumer
Electronic
Items
Software/ UI
R & D and Design
Display, PCBA,
Specific parts
Subassemblies
Housing,
Product
Circuit Design
components
Components
ICs, PCBs,
Electrical
IC Design
Raw Materials
Metals, etc.
like Silicon,
Plastic,
Inputs
Source: Adapted by authors from Stacey Frederick and Joonkoo Lee, “Korea and the Electronics Global Value Chain,” September 2017
https://gvcc.duke.edu/wp-content/uploads/Duke_KIET_Korea_and_the_Electronics_GVC_CH_3.pdf accessed on May 26, 2020
Page 12 of 16
Exhibit 5
Intartic’s Product Origin Mix – Imported vs. Locally Manufactured
Launch / Version Years

Category 2015 - 16 2016 – 17 2017 - 18 2018 - 19 2019 - 20 2020 - 21
Power
Import Local Local Local Local
Bank
Audio Import Import Import Import Import
Protection Import Import Import Local Local Local
Cables Import Import Import Local Local Local
Chargers Import Import Local Local Local
‘Import’ implies that the product, in a usable form, is brought from China.
‘Local’ implies that the product is assembled from components procured locally/imported
Exhibit 6
Value Chain Ownership as in 2019-2020
Category Power Bank Audio Protection Cables Chargers

Design In-House Outsourced Outsourced In-House In-House
Share of Cost 0.5% 0.5% 1.1% 2.3% 2.5%
R&D/ Technology Both Outsourced Outsourced Both Both
Share of Cost 1.4% 1.9% 0.7% 2.3% 6.2%
Components Both Both Both Both Both
Share of Cost 65% 72% 73% 45% 62%
Assembling In-House In-House In-House In-House In-House
Share of Cost 12% 2% 5% 29% 8%
Software NA NA NA NA NA
Share of Cost 0% 0% 0% 0% 0%
Marketing/ Sales In-House In-House In-House In-House In-House
Share of Cost 20% 19% 20% 20% 20%
Service In-House In-House In-House In-House In-House
Share of Cost 2% 5% 1% 1% 1%
‘In-House’ implies that the process is owned by Intartic.

‘Outsourced’ implies that the process is done by an external entity either local or foreign.
‘Both’ implies that the process ownership is shared by Intartic and a 3rd party
Page 13 of 16
Exhibit 7
Channel-wise Contribution in Sales
Page 14 of 16
Exhibit 8
Intartic’s Balance Sheet
Particulars (in Millions As on As on As on

of INR) March 31, 2017 March 31, 2018 March 31, 2019
EQUITY AND
LIABILITIES
Equity 13.7 18.4 18.7
Non-Current Liabilities 2.2 1.6 5.3
Current Liabilities 10.2 84.2 131.8
Total 26.1 104.2 155.8

ASSETS
Non-Current Assets 7.0 8.6 11.5
Current Assets 19.1 95.6 144.3
Total 26.1 104.2 155.8
Income Statement
Year Ended Year Ended Year Ended

Particulars (in Millions of INR)
March 31, 2017 March 31, 2018 March 31, 2019
INCOME: 11.40 87.03 155.52
EXPENSES: 9.35 63.96 131.70
Cost of materials consumed -7.60 -42.13 -44.93
(Increase)/Decrease in
1.22 31.29 27.26
inventories
Other direct expenses 4.83 15.54 16.03
Employee benefit expense .10 .88 2.30
Financial costs .47 2.45 2.92

Depreciation and amortization
2.92 14.25 19.20
expense
Other expenses 2.92 14.25 19.20
Total 11.28 86.24 154.48

Profit before exceptional and
.11 .80 1.03
Prior period items and tax
Exceptional items .00 .00 .00
Prior period items .03 .00 .00
Profit before tax .088 .798 1.033

Page 15 of 16
Brand Honor Xiaomi Noise Amazfit Titan Pebble Xiaomi Samsung Xiaomi
Exhibit 9
Mi Band
ColorFit Human HRX
Model Band 5 Mi Band 4 Pro BIP Hug HG01 Impulse Edition Gear Fit2 Mi Band 3i
SAFETY

Location N N N Y N N N N N
Sound Alert N N N N N N N N N
Audio Record N Y N N N N N N N
Image capture N N N N N N N N N
Water
Resistance Y Y Y Y Y Y Y Y Y
Inactivity Alert Y Y Y Y Y Y Y Y Y
Notification Y Y Y Y Y Y Y Y Y
FEATURES
Bluetooth, Bluetooth,
Data Sync NFC NFC Bluetooth Bluetooth Bluetooth Bluetooth Bluetooth Bluetooth Bluetooth
Upto 20 Upto 45 Upto 23
Upto 14 days days days Upto 5 Days Days Upto 5 Days
Battery (100 mAh) (135 mAh) Upto 3 days (190 mAh) (360 mAh) (70 mAh) (200 mAh) (110 mAh) (110 mAh)
OS Compatibility Android, iOS Android, iOS N Android, iOS Android, iOS Android, iOS Android, iOS Android, iOS Android, iOS
Product Feature Comparison
ACTIVITY
TRACKER
Heart Rate Y Y Y Y Y Y Y Y N
Steps Y Y Y Y Y Y Y Y Y
Hours Slept Y Y Y Y Y Y Y Y Y
SENSORS
Pedometer -
Steps Y Y Y Y Y Y Y Y Y
USB
Connectivity Y Y Y Y Y Y N N Y
Wireless
Charging N N N N N N N N N
Page 16 of 16
Price ₹ 2,599 ₹ 2,298 ₹ 2,299 ₹ 5,499 ₹ 4,999 ₹ 999 ₹ 1,299 ₹ 13,000 ₹ 1,299

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INTARTIC: RIDING THE IoT WAVE TO A SERVICE MODEL

ANSHUMAN TRIPATHY, PRANAV GUGLANI AND ABHIJIT S PULIMOOTIL

THE INDIAN MOBILE ACCESSORIES INDUSTRY

INTARTIC PVT. LIMITED

4 http://www.mobilityindia.com/indian-mobile-accessories-market-boom/ accessed on 28 May, 2020

Manufacturing for OEMs

INTARTIC’S ROUTE TO SMART WEARABLE MARKET

6 https://www.voiceflow.com/glossary/wearable-technology accessed on May 28, 2020

Intartic and the Indian IoT Market

9 https://www.news18.com/news/tech/smartphone-users-in-india-crossed-500-million-in-2019-states-report-2479529.html accessed on May

Intartic’s Value Chain and Organization Design

Retail Channel for Intartic’s IoT-based Products

THE WAY FORWARD

idc/articleshow/74367716.cms?from=mdr accessed on May 28, 2020

Leadership Team Current Role Previous Experience

Ramashish Ray Founder & CEO Global Sales VP Samsung; Nokia/

Ajay Sharma Sales & BD Sony and Amkette

Leong Yoong Tech Advisor Nokia, Xperi, Dolby

Pankaj Prabhakar (deceased) Design, R&D Nokia, Samsung & HP PM

Sanjay Pal -- Intex: R&D and sourcing, Service

Source: Company Documents

Source: Company Documents

Source: Company Documents

Launch / Version Years

Source: Company Documents

Category Power Bank Audio Protection Cables Chargers

‘In-House’ implies that the process is owned by Intartic.

Source: Company Documents

Source: Company Documents

Particulars (in Millions As on As on As on

Current Liabilities 10.2 84.2 131.8

Total 26.1 104.2 155.8

Current Assets 19.1 95.6 144.3

Total 26.1 104.2 155.8

Source: Company Documents

Year Ended Year Ended Year Ended

Employee benefit expense .10 .88 2.30

Financial costs .47 2.45 2.92

Total 11.28 86.24 154.48

Source: Company Documents

Source: Company Documents

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