An Ultrasound Foothold In AsiaPete Engardio
For three decades, GE's medical systems division ignored India. While rivals Siemens, Philips, and Toshiba dominated the market for diagnostic medical equipment, General Electric Co. let India fade from its radar screen. Two years ago, the company had just a sliver of the country's $80 million market in medical equipment.
But now GE is playing catch-up with a vengeance. A joint venture with local personal computer maker Wipro Ltd., formed three years ago, produces CT scanners, applications software, and various ultrasound devices--including a 20-pound portable unit that is being developed especially for the Indian market. The venture's goal: to boost sales tenfold, to $200 million, by the year 2000.
GE's showpiece in India is its 50%- owned medical systems venture, which is based in the southern city of Bangalore. Hardly a factor in India two years ago, GE is coming on strong in ultrasound devices, used for everything from detecting gallstones to monitoring the development of a fetus in a womb. The availability of the machines, though, while boosting infant health, has created some unintended consequences. In India as in other developing countries, the technology is often used to determine the sex of a fetus--which in turn often leads to abortions of females. While some women's groups in India criticize the machines' new availability, Wipro GE President Vivek Paul says that sex determination is a "very, very small percentage of their usage."
THE NEXT GENERATION. Still, ultrasound is a $16 million market in India, growing at a 20% annual clip. GE hopes to boost its profile even more next year, when it rolls out its next-generation portable ultrasound, aiming to put the machines in the reach of India's 1,000 largest hospitals and numerous small clinics. And by squeezing 75% of the functions of a conventional ultrasound into a 20-pound unit, says Paul, the device could fit in the back seat of a car as a doctor makes rounds at remote clinics. GE is working with local finance companies to help clinics and hospitals pay for the machines.
The basic ultrasound technology comes from GE's 75%-owned Tokyo joint venture with Yokogawa Medical Systems Ltd. GE entered the venture in 1982 to obtain knowhow for "economy" diagnostic equipment, which was dominated by the Japanese.
To actually design the new product, however, GE is tapping India's vast pool of inexpensive but gifted engineers. Wipro, which has tie-ups with Sun Microsystems and Epson, brought experience in designing computers, a key component of diagnostic equipment. Most of the all-Indian team of eight engineers working on the project came from Wipro. GE hopes to market the budget devices in other developing countries, too.
Boosting market share in higher-end products will be more challenging. Siemens, which has been making X-ray machines in India since the 1960s and controls more than half of the overall diagnostic market, has a reputation for superior technology and service. So to get its name out, Wipro GE has begun sponsoring lecture tours in India by famous American surgeons who use its equipment. It recently flew Dr. Harold Coons, a surgeon at Sharp Memorial Hospital in San Diego, to Bombay to demonstrate a fertility procedure.
SLOW PROCESS. Still, the competition isn't resting. Siemens is boosting its manufacturing in India, too. Philips also is now making low-cost ultrasound devices in the country, and Toshiba is exploring a production facility. GE is "going at it in a much more professional way," concedes Umush Chandra Dimri, marketing director for Siemens' Medical Engineering Div. in New Delhi. "But their success won't come fast."
But while it may have difficulty being No.1 or 2 in every segment, GE figures markets such as India's are too important to ignore. "If you aren't in Asia," says Joren Malm, president of GE Medical Systems' Asia operations, "in 10 or 15 years you might as well be nowhere." India slipped from GE's sight once before. It won't happen again.