TAIWAN – The CEO of ARM, Simon Segars, came to Computex Taipei to talk at the Summit Forum about enabling innovation this week. Technology is getting more personal and that is an opportunity for both consumers and suppliers. At the same time, smartphones are becoming more of a commodity. As an example, Segars pointed to jelly beans – not the Android variety, but the candy.
He says that the Jelly Bean Factory, a company started in the 19th century, has been able to stay relevant by creating unique jelly bean flavours, like tobacco, to differentiate itself from the sea of generic jelly beans. The lesson here is that in a commodity market, differentiation is not an option, but a necessity if you are to have any chance of thriving.
Today you can find a smartphone for sale for just $25 in some markets, with the mid-market being a few hundred dollars for a smartphone, while the ultra-top end having smartphones for thousands of dollars. For example, Vertu sells phones that come with their own concierge service. What this means is that there is a smartphone at every possible price point.
All the choices have been enabled by the global supply chain “which has been driven by the smartphone as a disruptive device,” said Segars, and that has changed the way supply chains come together. He added there’s been a knock on effect on other technologies like cameras, music devices and health tracking.
It’s not that these markets have evaporated into thin air, but they have changed. The market for point and shoot cameras has disappeared, while the market for DSLRs have taken centre stage. MP3 players now exist as software on your smartphone. rather than as a separate device, and there are now a plethora of health trackers that can connect to your mobile device to track you in any number of ways.
In addition to creating hardware and software, what manufacturers are doing now is creating services around their products to maintain their relevance in the marketplace. This can be anything, from allowing you to stream music to your device for a monthly fee, to analyzing your health and providing recommendations.
The challenge for suppliers is that as the market is increasingly commoditized, there is a rapid decrease in price as more companies enter the market, which increases volume and this is readily apparent with DVDs.
Manufacturers use new features to help maintain the price, as was the case in the evolution of the DVD Blu-ray. As a new feature, it offered HD picture and sound quality to consumers to help them retain the value of their products in the eyes of consumers.
“When it comes to driving innovation, we’ve never had more favourable conditions to create new products and get them to market in a very rapid way,” Segars said. He added manufacturing on the semiconductor and product side is becoming more and more efficient, which lowers the cost of developing a product and increases the speed it can get to market.
Simon talked about how the era of innovation through product development is open to everyone through Kickstarter for funding and feedback. You can do rapid prototyping through 3D printers, sensor and semiconductor manufacturers.
Then once you have a product that needs a retail partner, using an ecommerce platform like Amazon, Alibaba or even small players like Toronto’s own Shop Locket, it becomes easy to get a product to market.
He went on to say the heart of this innovation is the mobile device.
“Once you give another five billion people on the planet a smartphone, you’ll see new levels of innovation, new opportunities and new markets develop that we can’t even contemplate today,” he said. “The nature of product development has changed … we are moving from a world of a very few high volume product categories that drive innovation.”
He added there are “thousands of smaller volume products that can leverage all the benefits of advanced manufacturing, the cloud, software development to produce products that can sell in much smaller volumes but be much more personalized to the consumer.”