In the United States we see today the imminent death of the once mighty automobile industry.

General Motors is unlikely to survive the next months without government intervention and a surprisingly large number of Americans are just fine with that. The sad facts are that aside from the economic carnage that a collapse of GM would have on the American economy, nobody really cares whether this company survives.

That is a shocking state of affairs considering the love affair we've had with GM over the last 100 years. I'll shed my own tear as my first, and best, car I ever owned was a 1967 Chevrolet Camaro convertible, purchased in 1975 for $600.

Fast forward to 2008. I drive (in my German car) to the local mall on a mission to purchase a new iPod for my son's birthday at the Apple store at the local mall. Parking is surprisingly easy to find given it's the weekend and the holiday shopping season. Many shop keepers are standing outside their doors beside their "40% Off!" sale signs, hoping for people to come inside and buy something.

As I pass the disappointed merchants and round the corner, the Apple store comes in to view - filled with customers with smiles on their faces.

The contrast was remarkable. Here were the Apple employees wearing colour-coded uniforms who were smiling, friendly, and knowledgeable. There was a palpable "buzz" at the store and most remarkably - nothing was "on sale". People were happily walking out of the store paying full price, carrying their little Tiffany-esque Apple store bag. Steve Jobs has tapped into the psyche of the modern consumer like no one since Henry Ford.

Who is the Steve Jobs of the American automotive industry? Certainly, no one comes to mind that is prepared to capture the imagination of the public.

As Michael Moore chronicled in his 1989 film documentary "Roger & Me", Detroit is populated by bureaucrats and bean counters isolated from the real world in their ivory towers. A retired Porsche executive once asked me what I believed to be the last innovation of an American car company that was not 1) related to compliance to a new government regulation (e.g. airbags), and 2) driven by competition from foreign car companies. The surprising answer: the Hydra-Matic automatic transmission invented by General Motors and introduced in 1940 - some 68 years ago.

The future of automobiles in the 21st century is in technology. Just as cell phones are turning into a "convergence device" bringing together all forms of communication, the future of automobiles also lie in convergence of communication, transportation, and entertainment technologies packaged in a safe, mobile cocoon. As Thomas Friedman said in an op-ed piece in the New York Times last month, "somebody ought to call Steve Jobs, who doesn't need to be bribed to do innovation, and ask him if he'd like to do national service and run a car company for a year. I'd bet it wouldn't take him much longer than that to come up with the G.M. iCar."

A little closer to home, are we any better off in semiconductor and EDA? Who is our Steve Jobs?

Google's Eric Schmidt has said "To address our economic problems and create jobs, we need to put innovation first." Certainly that seems to be the case at Apple, where we see no end of innovation and bringing a form of high tech art and cool to consumer electronics. Apple products are fun, engaging, personal, and above all a trendy fashion accessory.

It seems to me that semiconductor and EDA are so far down in the value chain that it makes it difficult for that brand cachet to move up to the consumer level that can associate value with it. Can Sarah brag to her friends her iPhone uses an Infineon chip? Does Jack's prestige go up when he tells people his TomTom has a chip which used Mentor Graphic's Calibre for R&C extraction? I think not.

That's because semiconductor and EDA represent the brick and mortar of the high tech industry - not the building. Kudos goes to the architects, not the bricks or trowels. Intel alone has been able to achieve this level of brand awareness at the semiconductor level with its "Intel inside" campaign and perhaps it is no coincidence that Intel is the world's largest and most well-known semiconductor company.

Perhaps the upheaval in the global semiconductor market is a signal we have reached the limit of benefits that are achieved from a disaggregating supply chain. It could be Philips doesn't benefit from the spinout of NXP, or Infineon from Siemens. Perhaps the future lies with a new 21st century variant of vertical integration that allows differentiated pricing power to flow down into the entire value chain.

Could it be that Apple's acquisition of PA Semiconductor is a hint of that future and once again Steve Jobs is leading us back to the future? It's something to ponder.

Warren Savage, President and CEO of IPextreme, is a well-known and published authority in the field of semiconductor intellectual property.

He has a long history of pushing the envelope of design methodology from his work in fault tolerant computing at Tandem Computers in the 1980's and driving reliable design methodologies into commercial practice at Synopsys for its DesignWare IP product in the 1990s. Much of his thinking became embodied in the seminal book on IP reuse, the Reuse Methodology Manual.

Previous columns

(Nov 07) Warren Savage On: Making the Case for Invented Here

(Dec 07) Warren Savage On: Swiss Cheese Solutions

(Jan 08) Warren Savage On: Collaboration Needed for Success

(Feb 08) Warren Savage On: Knowing Your No

(Mar 08) Warren Savage On: The Next Big Thing

(Apr 08) Warren Savage On: Gumming Up the Works?

(May 08) Warren Savage On: Waiting for Godot

(Jun 08) Warren Savage On: Our Virtual Future

(Jul 08) Warren Savage On: Being Plugged In

(Aug 08) Warren Savage On: The Dog Days of Summer

(Sep 08) Warren Savage On: Samurais, Sedans, and Semiconductors

(Nov 08) Warren Savage On: Doom and Boom