Platforms, Control, and Verticalisation
“Why am I selling my best image sensors to Apple?” asks Sir Howard Stringer, CEO of Sony and others, notably Samsung, must be wondering why, for so long, they supplied Apple with the wherewithal to thrash them in end product markets.
Without NAND, without displays, without foundries, without sensors, where would Apple be?
Now Samsung is reaping a bitter harvest of IP lawsuits from Apple locking it out of markets for its Galaxy Tab.
You might well ask: Why give your competitor a large part of his competitive edge?
So, does this mean vertically organized companies are going to keep their components largesse for their own end products?
Does it mean design and marketing companies will have to start making more of the componentry of their products in-house?
Apple, with 1,000 IC designers, may well be saying ‘Yes it does.’
All this was raised by Ravi Subramanian, CEO of analogue EDA specialists Berkeley Design Automation whose thesis is that electronics systems companies have to bring down the cost of their products if they are to appeal to the emergent middle classes of Asia, particularly in very fast growing economies like Vietnam, Indonesia and Bangladesh.
The only way for OEMs to do that is to make platforms which cross multiple products and to make them cheaper.
One way to make them cheaper is to drive down the micron trail and “50% of the design starts in 2011 will be on 40nm, and 80% of the revenues will be from 65nm,” says Subramanian.
And another way is to take control of all the main elements of an electronic system which, in Subramanian’s view are: apps processor; sensors and displays; power management; memory; connectivity and cost-reduce them.
“All of them need to be cheaper,” he says, adding “Panasonic want to reduce their TV BOM by 3x which requires a fundamental re-design.”
Subramanian reckons that the industry’s winners will need to control as many as possible of those five elements while driving down their cost.
And that can only be done by a verticalised industry.