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Summer's Hot Surface News Increases Competition and Growth

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The news around the latest smartphones and tablets is similar to summer weather in Texas, continued heat with no sign of abatement. Thankfully for the industry, smart wireless devices (SWD) are keeping pace at the fore of demand and along with that increased OEM competition and announcements.

This week's biggest news story was certainly Microsoft's Surface, running Windows RT on an ARM CPU, which is the latest tablet PC to compete head-to-head with Apple's iPad and Samsung's Slate, among many others, as well as an upgraded version, Surface Pro, that will run Windows 8 on an Intel CPU, and which is set to compete with the Intel's Ultrabooks and Apple's MacBook Air series, respectively. To add more fuel to the summer's hot news this week, there is also talk that Microsoft may be releasing its own smartphone this Fall in addition to the Surface tablets, that will further showcase its Windows Phone 8 software to be released around the same time (see this review from PCWorld), as discussed in this Reuters article.

There are many angles to all of this news, on the positive side for the global semiconductor and electronics supply chain is the simple fact that SWDs are holding their very strong demand trend, and with this increased set of major OEM offerings, the forecasts for device production volume is high which will improve costs, through competition and economies of scale, which will then increase penetration and so forth. This positive growth cycle supports the wider supply chain, which is positive news.

Beyond the supply chain mechanics of having healthy competition between multiple devices and leading OEMs for in-demand devices, there is two other important angles to this story: firstly,  the underscoring of what Apple knew from the outset, deep integration of hardware and software creates a unique differentiator and improved user experience; and secondly, the longer-term positioning of tablet PCs and their functional use (a tablet, a PC, or both?). Apple has held, since the introduction of the famously still popular iPad, that the tablet is a different type of device than the laptop, and importantly so. Different devices to fulfill different functionalities, capabilities, expectations and accomplishing these different demands through necessarily different user interfaces and operating systems (OS) for different experiences with different data capturing and manipulation.

Obviously, Microsoft, like the other major OEMs succeeding in the SWD space today, recognize the importance of OS and device hardware and are leveraging that point successfully. This is the point where the present story moves beyond a simple device BOM volume growth report to a deeper question of the next phase of component design for the semiconductor and electronics industry. As our industry continues to mature and change, the increased integration of devices either to be highly multifunctional and/or to be seamlessly interconnected to achieve more intelligent capabilities driven by users will entail a change in the components themselves. Already we have seen the move to more complex processors and system on chip (SoC) designs recently, and this trend to multiplex processors that can also be multipurposed based on middleware changes rather than hardware changes is becoming more pervasive and more demanded due to cost efficiencies (see for example DisplaySearch Blog for a similar trend in the SmartTV IC sector).

While the excitement is around how the competitive landscape could shift as a result of Microsoft's breaking out of a 37-year hardware hiatus, on the hardware side, there is a bigger and equally fascinating anticipation of how these latest devices will guide our next phase of industry maturation through a new framework for designing the next generation of components (see Smith's upcoming MarketWatch Quarterly for deeper analysis on industry changes, free subscription available).


Lisa Ann Cairns, Ph.D.
Written on Friday, 22 June 2012 12:30 by Lisa Ann Cairns, Ph.D.

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