Brainstorm: less functionality per device, more devices

[Matthew S. Hamrick]

Okay... this topic has been  discussed to death, here and elsewhere.  
Let me recap by saying:

a. A constellation of cooperating devices is bad because you have to  
make each device smart enough to talk to each other device, and know  
what it's supposed to do. And as Fabien points out, testing is a  
concern.

b. The constellation approach is good because it allows the end user  
to use a "best of breed" approach for components that are important  
to them.

But being a bit of a business geek on the weekends, there are also  
economic / product strategy reasons why the constellation is  
problematic.

1. The cost of a constellation that does (GSM + Nice Display +  
Camera) will likely be more than an integrated device that does the  
same thing. Why? because each of the three constellation devices will  
need separated batteries, bluetooth transceivers and enclosures. The  
integrated device will need only 1 case, 1 BT transceiver and 1 battery.

2. From a product strategy perspective, the "best of breed" approach  
of the constellation requires device manufacturers to open up an  
interface to their device to third party products. In fact, the  
constellation works best when there's a high-function, well defined  
interface between your module and third party modules. But this is a  
hard sell to product managers who would fear the product becoming a  
commodity. In other words, if you create a mobile "GSM <-> Bluetooth  
gateway," you've got to create an interface to control it so your PDA  
with it's big screen can cause it to dial the phone. But once this  
interface starts to solidify, what's to prevent someone else from  
building a GSM to Blooteuth gateway and selling it for 10% less?

3. The product lifetime of the individual components will be longer.  
Handset manufacturers are currently rewarded for planned  
obsolescence. They book revenue whenever you buy something. So if  
they can get you to buy something every 12 months instead of every 18  
months, they get more money.

But you can also make economics work in your favor...

1. It's possible that the market for the individual constellation  
components would be larger than just the consumer cell phone market.  
For instance, there's a comparatively small, but not insignificant  
market for GSM modules in the telematics space. If you created a GSM  
to Bluetooth / USB gateway that could be used for consumer as well as  
industrial uses, it's conceivable that the increased production will  
drive the NRE / fixed cost per unit produced down to a point  
comparable to that of the integrated device.

2. There's an outside chance that a longer product life could be  
converted into higher revenue. From a product positioning  
perspective, you could argue that even thought the cost of the  
constellation will likely be greater than that of the integrated  
product, the customer is paying for a product that is "future proof."  
That is, when one of the components is obsoleted, only that component  
must be replaced, so in the long run it's cheaper.

3. Also... related to point 2, let me just say three words: "Extended  
Service Plan." w00t!

4. If your business is selling mobile devices, then an integrated  
product is probably the way to go. But if you're selling a product  
that lives "higher up the food chain," like a consulting or a  
communication service, then the best of breed can be the right approach.

-Cheers!
-Matt H.

On Jul 3, 2007, at 9:19 AM, Fabien wrote:

> If you want, say, phone, music and camera capabilities:
> - either you have plenty of pockets, then you buy a proper camera,  
> a proper phone and a proper mp3 player
> - or you don't want to carry an extra 2kg in your pants, then you  
> buy an all-in-one device; then compactness is a must.
>
> For many features, there's little value added by the ability to  
> chain devices together: you might save extra screens, maybe RAM and  
> CPU, but the space you gain is lost by connectivity gear, and the  
> money you save on hardware is lost in harder testing, logistics  
> (it's hard and expensive to handle stocks of plenty different  
> modules worldwide), reliability (it's hard to make stuff  
> communicate reliably when they aren't soldered o nthe same PCB).
>
> For most cases where chaining makes sense, bluetooth protocols  
> already exist, and you don't even need to get every device from the  
> same vendor. You don't want the reliability, bulkiness,  
> availability and extra cost issues of a ZIF-like CPU socket or  
> modular RAM sticks; if you want more Flash, microSD is your friend.  
> etc.
>
> As for going clubbing without a GPS, that's the best way to get  
> lost while trying to go there :)
>
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