Tunnel vision is becoming a problem for the electronics industry. One company and a handful of products are dominating discussions in a trillion-dollar market, and this is making it difficult for many industry players, OEMs, component vendors, software vendors, and other third-party services providers to realize potentials for huge sales growth outside of smartphones, tablet PCs, and digital music players.
If you haven't got the drift of my argument here, let me put it a bit more bluntly: There's a lot more to the electronics industry than Apple Inc. (Nasdaq: AAPL) and the iPad, iPhone, iPod, and whatever other iProducts are coming down the pike. For an industry where annual semiconductor sales have barreled even through a recession to hit more than $300 billion, and where global electronics revenue exceeds $1 trillion, we all seem to be oblivious to the possibility the high-tech universe does not revolve around planet Apple. The company's sales are huge and its growth potentials tremendous, but opportunities exist elsewhere for hardware and software development, and I am afraid we are missing many of these.
Here's an example: I attended a presentation given one year or so ago by NXP Semiconductors N.V. (Nasdaq: NXPI) at the annual LightFair International Convention held in Philadelphia and saw some cool stuff I wished I could right away install at home. They had wireless chips installed in lighting fixtures (bulbs) and electrical outlets. The presenter demonstrated how you could control all the lights and outlets in the house from a simple remote controller.
From the living room, you could check and make sure all lights in all sections of the house were off or on, depending on your preference. You could see which outlets were being used (for instance, if the iron is plugged in and inadvertently left on) and turn these on or off. You could also control (switch on or off and program) your stove, heating system, hot water boiler, TV, stereo system, exterior lights, the security system, awning, etc. Anything that can be connected to a power source can be remotely powered off or on and programmed. Fascinating.
The guy had me, seriously. Then he sank the hook in deeper. It turns out I can do all of these from my smartphone, remotely -- from Iceland, Mongolia, Senegal, or a nearby office in New York -- as long as I have wireless reception. I was sold. This wasn't some futuristic thing. It's here now, the NXP presenter said, and all I had to do was engage with some company that has partnered with the European chip vendor to bring these to market. Power supply companies in Europe are particularly interested in these lighting inventions and are beginning to roll these out, in addition to their deployment of smart meters.
A recent blog by EBN Europe contributor Jennifer Baljko brought this back to my mind and got me wondering how far the industry has gone in implementing this lighting revolution. (See: Wireless Connectivity & the ROI Conundrum.) I also watch with some amusement and a dash of disappointment how the industry and buyers have become obsessed with only one segment of the consumer electronics industry -- smartphones and tablets -- ignoring other sections that promise even greater utility and savings.
Today, the media is devoting a lot of time and attention to speculations that Apple is about to unveil an update to its iPad tablet PC. The obsession is a global phenomenon; in Canada, the Globe and Mail newspaper is providing "live coverage of Apple's product announcement." The paper talked about "iPad fever," and I wonder if we are not the ones driving up temperatures artificially. In the US, most news organizations have writers on high alert to provide running commentaries on the event. I have personally received several emails from analysts commenting on the Apple event, whereas the company itself has not confirmed or denied the speculations that the announcement would be about the iPad.
OK, we shouldn't begrudge Apple the goodwill it has with consumers and the media, but there's still a lot more happening in this industry that deserve some attention. By focusing solely on one product segment and company, many of us are missing out on the bigger picture. Never has the worn adage "a tree does not make a forest" been more relevant, in my opinion. Opportunities exist in lighting for creative designs, software apps, and manufacturing.
Sales opportunities are opening up in other segments of the consumer electronics industry like lighting, creating jobs and offering astute investors new areas for investment growth. But many, including companies operating in this industry, don't even know about these new areas because the prevailing sentiment is that if you don't have a product designed into the iPad, the iPhone, the iPod, or the next-generation products from Apple, you don't exist.
Let me return to the LightFair event. NXP was the only semiconductor company at the show I attended. There are others in the semiconductor; PCB; enclosures; and interconnects, passives, and electromechanical (IP&E) markets that also sell products into the fledgling lighting industry, but many chose not to attend LightFair because they didn't see the potentials here for revenue growth. I'd like to spell it out here. The sales potential is huge, starting with bulbs, as described above, but extending to all other household equipment.
The NXP executive at LightFair explained that the new lighting products do not require rewiring a house to work. It is simply plug-and-play for bulbs, and changing outlets for power connections. The iPad and tablets are probably as revolutionary as some people believe, but there's a lot more happening in the industry that will drive growth -- if we would only open our eyes to these opportunities.