Innovation Requires Market Enablement | TechNewsWorld

[ad_1]

In this age of tech industry consolidation, one has to wonder what will happen with the pace of innovation as a few large companies begin to dominate.

In personal computers, the WinTel (Microsoft Windows and Intel) marriage continues to control the technology, while Dell, HP and Lenovo control the devices. Similarly, in smartphones, Apple and Samsung, which both design their own chips and devices, dominate the market, especially in North America.

It is natural for market leaders to emerge as technologies and markets mature. However, that maturity often is accompanied by a change in the strategy of key players.

There’s a shift from market enablement — that is, seeking to share technologies and enable competition — to market control. Key players continue to innovate, but they seek to limit access to their technology as a means of controlling the market or the pace of innovation.

Intel and Microsoft once sought to not only innovate, but also to enable any original equipment manufacturer to build PCs and compete with Big Blue (IBM). That changed as the two companies rose to dominance, often squeezing out competitors and leaving startups with one hope: being acquired by a market leader. So, what happens to innovation and market enablement as smartphones and other segments also mature?

Enabling an Ecosystem

While the acquisition strategy of startups is nothing new, I do not believe this should be the strategic goal of innovators. It is still possible to outmaneuver the industry powerhouses, as long as a strategy includes both innovating and enabling the market.

Despite the PC example, I am encouraged by many of the current startups and other industry leaders not only to innovate through huge investments in research and development, but also to enable the market.

For example, at Huawei’s recent Connect conference in Shanghai, the company indicated that it was targeting just 1 percent of the cloud ecosystem that it hoped to enable through its partners, and it was pleased with that figure.

Similarly, by some estimates the average smartphone leverages more than 200,000 active patents from more than 30,000 patent holders, the largest being a handful of companies like Qualcomm, Ericsson, and Nokia, all of which have been willing to license their patents to all smartphone OEMs.

While not all of those patents would be considered essential for the construction of the smartphones, it’s clear that the experience of using a mid-range phone like the Chinese Oppo R11 or even the new Apple iPhone X would not be the same without those patents.

Qualcomm alone spends US$5.15 billion in annual R&D, and it grants access to its entire pool of Qualcomm intellectual property, the largest in the industry.

Additionally, the concept of enabling an ecosystem has allowed a small processor design company, ARM, to rise to the top of the semiconductor’s largest ecosystem, which ships more processors than all the PCs and enterprise servers combined and is still growing.

Market Influencers

We will see new companies emerge through new areas of innovation, such as connected devices (Internet of Things, or IoT), augmented reality and virtual reality (AR/VR), autonomous vehicles and intelligent solutions (machine learning, or ML), deep learning (DL) and artificial intelligence (AI).

Many of these new areas have become the focus of acquisitions and consolidation by industry powerhouses, but the culture of the organization ultimately will determine whether innovation continues to be accompanied by ecosystem enablement.

In PCs, Microsoft once again has been aiming to reinvigorate innovation and ecosystem enablement by building PCs based on ARM-based processors, beginning with Qualcomm’s Snapdragon mobile processor — they’re two of the previously mentioned industry enablers.

Microsoft also has been contributing code to the open source community through GitHub.

Likewise, the industry has been going through a major shift as it approaches 5G, which will entail not only new mobile devices, but also broader connectivity of all electronics. Two of the companies most heavily investing in 5G technology are Huawei and Qualcomm, market enablers.

While it is natural for mature companies to shift from being market enablers to market controllers, in this age of startups vs. powerhouses (or Davids vs. Goliaths), it’s growing clear that those that both innovate and enable are likely not only to influence the market, but also to grow their respective market segments.

[ad_2]

Source link

Recommended For You

About the Author: NFS

Leave a Reply

Your email address will not be published. Required fields are marked *