Dealing with Disruptive Technology and the IoT

July 10, 2018

It’s a bit of jargon that’s maybe over-used, but if you’re an electronics designer you need to be thinking about so-called ‘disruptive’ technologies.

Why? Well, if you’re not convinced of the impact, ask Kodak about how digital cameras hit their film business. Or talk to Sony about what the iPod did to the Walkman. Or ask Blockbuster how they feel about Netflix.

You get the idea. There’s a long list of established products and markets that have been disrupted by innovation – often happening before the incumbents have reacted.

Disruption doesn’t just occur in consumer products. The Business-to-Business sector (B2B) is more complex and often moves slower, but big changes still occur. Right now, for example, IT systems are rapidly shifting to the cloud.

The IoT and Disruption

In the electronics sector today an obvious candidate for the status of a disruptive technology is the Internet of Things (IoT). It’s driving massive change, with analyst IDC predicting IoT spend to reach $772 billion in 2018 and a trillion dollars in 2020.

The largest part of that spend is expected to be on hardware, with manufacturing and the industrial IoT (IIoT) leading the way as the highest-spending market, at $189 billion.

This means that if you’re an OEM in this sector, you must respond. If you’re not competing with IoT products you’ll miss out on a huge market opportunity. And the risk is you’ll simply be left behind, as your customers demand IoT solutions and other companies step in to meet that need.

What does this mean in terms of technology changes? The IoT, almost by definition, means there will be a shift towards high volumes of relatively low-cost devices, increasing cost pressures on designers and OEMs.

There is also a strong focus on wireless connectivity, with low-power, low-cost standards such as Sigfox and LoRa competing for market share – and the telecoms providers fighting back with LTE and other cellular technologies.

How to Respond

If you’re going to respond to disruption on the scale of the IoT, take it seriously. Consider changing everything you do, but make sure you learn from past examples in your sector. And think about making that change sooner than seems necessary, so you don’t get overtaken by events.

Take the opportunity to review your approach to engineering problems, and at the start of each new project, have a look at your options. Generally, you’ll want to be fast to market, to respond flexibly to what customers want and to keep development costs low so you can remain price-competitive.

While disruptive technology forces change, that’s not always a bad thing, of course. The shake-up creates many new opportunities that can be grabbed by those alert enough, giving them a chance to steal the lunch of slow-moving incumbents.

In terms of your options for components, it’s no exaggeration to say the semiconductor industry is also undergoing disruptive change. There are many emerging markets that are not well served by existing standard products, not least the IoT. Custom mixed-signal ICs from companies such as S3 Semiconductors are filling this gap.

Among their many benefits custom ASICs provide component consolidation, which reduces the BoM and associated lead times. This in turn helps cut time to market so you can respond quickly to disruptive change. You can work with the expert system architects at a custom IC supplier to create your own optimized ICs. That means higher performance, lower power consumption, and less PCB area.

And the economics of custom semiconductors mean that you’re going to make cost savings compared to standard parts, in many cases – we’ve achieved up to an 80% BoM reduction for our IoT customers.

Overall, don’t be complacent, but don’t be negative – the IoT is creating huge opportunities for companies that can move quickly. Just make sure you’re ahead of the curve.

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