Is There a New Way Ahead for Electronics Enterprise? Part 4

In the previous blog in this series, we considered the design and marketing philosophy that some companies use to ensure continued sales. Then we started looking at a different approach that perhaps some brave souls might try.

The introductory part of this article describes the degenerating product situation for users, driven by designers. In this concluding part, possibilities for a new way of introducing products to the market are mulled over.

If product designs are generally appealing and open-sourced in a way that Linux is open-sourced, then the barrier to manufacturing — the risk of investment — is lower, because no licensing agreement with the designers is required (other than to adhere to the open-source agreement). However, contract manufacturers generally would not be interested in taking the risk to manufacture them. Their business is providing an outsourced function for traditional companies. They can manufacture, but who would handle sales and customer support?

Beyond contract manufacturers, there is always a dynamic supply of technical and business people who want to be small-scale entrepreneurs. Howard Vollum and Jack Murdock viewed Tektronix this way in the very early days. As in their case, the successful entrepreneurs are technically innovative people who manage to perform a traditional company's other business functions adequately. A less innovative prospective entrepreneur will not have the bright idea and will have no direction to go, despite having business skills. However, if free designs are ready for manufacturing, and entrepreneurs think they might have market appeal, they can start making them. Anyone can. The barrier to entry — the risk of capitalization — is small.

Designers can realize a return on their efforts by introducing the product to the market through a supplier with whom they have a profit-sharing kind of an agreement. Once the product is introduced into the marketplace, the documentation for it is released. Competing suppliers can now manufacture it, but the originating supplier has the market edge. The designers are also free to consult with additional suppliers for an agreed compensation.

The only practical difference between this system and the current state of affairs is that competitors do not have to do as much reverse engineering, though more subtle points about the design remain undisclosed, despite the availability of circuit diagrams. A substantial disclosure sufficient to allow a user total product ownership of repair and even design modification need not extend so far as to train the competition in the finer points of the design. How far depends on what the designer is willing to reveal.

To build user-designer-supplier community support for a technology, at least the H-P/Tek/API level of disclosure is necessary. Microcomputer software — if it is written in something other than C (such as Forth, which remains advantageous for real-time system development) — poses a barrier to use by another supplier, though the source code is divulged. Circuit-board layout files similarly pose a format barrier when public-domain board editors are used, such as the Protel-derived CircuitMaker and TraxMaker 2000. So do FPGA formats (VHDL versus Verilog or something else). As products become a more complex mixture of analog and digital, copying by another prospective supplier remains a nontrivial task.

We will continue examining this open access approach and look at sales and product support in part 5.

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7 comments on “Is There a New Way Ahead for Electronics Enterprise? Part 4

  1. etnapowers
    December 2, 2013

    “Designers can realize a return on their efforts by introducing the product to the market through a supplier with whom they have a profit-sharing kind of an agreement.” The designer should be paid by the supplier depending on the volumes of parts sold in consequence of his idea.

  2. samicksha
    December 4, 2013

    I guess what we see today is reuse of proven designs allowed progressively more complicated ICs to be built upon prior knowledge.

  3. Davidled
    December 4, 2013

    Today, so much technology is already built and approved. For new application and product, all HW and SW are reused so that design effort is much less than initial effort. Only concern is that there is one possible issue occurred when integrating the reuse and new portion. But, it could not be a major problem.

  4. samicksha
    December 5, 2013

    @Daej, I am not sure though but is it call for improvement in computerized circuit simulation tools.

  5. Victor Lorenzo
    December 5, 2013

    @Daej, “For new application and product, all HW and SW are reused “.

    In my opinion, not all development team managers and project managers give code/hardware reusability the strategic importance they should, at least to the extent of my experience with my pevious employers and customers I've been in direct contact with.

    But yes, at least code reusability/portability must be a strong requirement during software design.

  6. etnapowers
    December 5, 2013

    @samicksha: when using an IP for example, an engineer has to adapt the electric scheme to the new technologies adopted for realizing the IC components. This is not simple because  the designer will encounter new effects and  new issues due , for example, to the miniaturization of some parts or to the different realization of some components in the new technology.

  7. etnapowers
    December 5, 2013

    @DaeJ: that's correct , this applies perfectly to the redesigns of  existing products to improve or to add some new functionalities.

    When you have to create a new product, in a totally new technology (I'm thinking for example to photonics on chip) the HW/SW reutilization is really more difficult.


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