Moore’s Law (Part 4)

In the final analysis, it all comes down to the Market:

In the previous article of this series we looked at the concept of profiling opportunities and businesses through the use of “KPIs” (key performance indicators). Here, with the dramatic example of the mobile phone business, we will look at how dramatically technology industries can change in a relatively short time.

1999 Mobile Handset Shipments By Manufacturer (% Share)

Pie Chart of Mobile Phone Manufacturers

By the ‘2000s,  the mobile phone business had become the defining technology industry.  The miniaturisation and functional requirements of what were rapidly becoming “lifestyle” devices drove technological evolution at all levels: from the processors and supporting logic through packaging, interconnections, and the all-important user interface.

So, let’s take a look at the mobile business now. With the exception of Samsung the players have all changed! The game is being driven by new players and new functional concepts. The Smartphone is the dominant influence as the phone is seen more and more as the gateway to a world of information, convenience, communications, and social networks.

Pie Chart of Mobile Phones market share 2015 Q1Figures compiled by Statista

And this model is already changing. For example, ”wearable” devices such as the so-called “smartwatch” are providing a bidirectional perspective: looking out to the world via an accompanying smartphone and looking inwards to the user’s activity profile, agenda, and vital indicators.

At the same time, the development of the  ‘Internet of Things’ or,  alternatively, the ‘Internet of Everything’ is opening up a whole new world of information and control that can be accessed from any device connected to the network- from desktop to smartwatch.  Your car tyres will be telling you their pressure and your home will be keeping you posted as it manages itself through technologies such as the Nest building control system (sold to Google last year for 3.2 billion dollars).

Sony Xperia Z3+

As new device concepts take hold with increasing rapidity, new players are ducking under the technology barriers to entry, bringing smartphones to market faster and dramatically cheaper.  We have researched emerging players such as Xiaomi who represent a fundamentally different approach to a technology business. These differences require definition of KPIs which profile a highly profitable and very fast growing company (see Moore’s Law Part 3).

Will these new business strategies – cheaper, rapid design change, v small lot sizes, zero advertising – be the templates for successful new entrants? Many of the new players do not even show up on the market share charts for 2014! New business models for this industry will continue to evolve and diverge from the normal ODM. No Nokia, Ericsson, Fujitsu, Siemens, Philips, Panasonic, NEC , Alcatel, Oki, Mitsubishi, Sony… and maybe even no Samsung!

How does all this turn into KPIs which enable companies along the value chain to plan their business?

Taking a specific example, many companies have chosen the KPI of the via annular ring diameter as a measure of technical capability.  However, the physical dimensions of the mobile phone are actually increasing to enable larger display screens and extraordinary increases in processing power, suggesting more real estate is becoming available on the motherboard. Consumers have even been prepared to put up with shorter battery life in favour of enhanced  features such as communications, display, and processing capabilities of their devices.  This shows that it is crucial to consider other KPIs  that provide additional perspective on how hardware actually translates into performance. One area of focus is the packaging / interconnection technologies which have enabled total silicon area to surpass motherboard area for the first time.

Design imperatives and their associated KPIs are also driven by the rapid developments in the market and by the wide range of new roles played by personal electronics. Therefore, taking the wider view is essential to the process of being sure that your product and market development do not get swept away by those global forces which are driven by new markets as well as by both hardware and software technologies.

At BPA, we are getting excited about ‘Post Moore’ packaging: the inevitability of the third dimension,  about power electronics – setting the Smarts to Work and about the impact of the Internet of Things on the speed and volume of communications.

If you would like to know more about how we can help your business, please get in touch:

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BPA Consulting Ltd

Tel: +44 (0)1306 875500
Skype: bpa-consulting

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