2. MiG 25 Pilot Defects Soviet Union
Viktor Belenko - September 1976
March 15, 2011 Slide 2
3. MiG 25 – The Teardown
Reverse engineering has
been used by military
organizations since the
Second World War and
extensively during Cold
War
Used by militaries in
order to copy other
nations' technologies,
devices or information
Used by commercial
organizations for
competitive advantage
March 15, 2011 Slide 3
4. In a German Biergarten…
Gizmodo publishes photos
of Apple iPhone 4 prototype
found in Silicon Valley bar
March 15, 2011 Slide 4
5. Shanzhai Beats Apple to Market
The “HiPhone” and
“Blockberry” are very
popular in China
March 15, 2011 Slide 5
6. A Competitive Advantage?
Unit Sales in Millions Shanzhai can bring new
180 phone to market in as little
as 45 Days using System on
160 Exports
a Chip technology
140 In China 10% of Worldwide Mobile
120 Phone Sales
100 60% Exported from China
80
Advantages of Shanzhai
60
• No Market Research
40 • No Product Design
• No Testing & QA
20
• No Licensing or Taxes
0 • No Inventory
2005 2006 2007 2008 2009 • No Sales Force or Stores
Source: Stanford Graduate School of Business and Hong Kong University of Science and Technology – Shanzhai Mobile Phone
Companies – The Guerilla Warfare of Product Development and Supply Chain Management
Source: http://www.shanzhaiji.cn/talk/20081202/6216.html
March 15, 2011 Slide 6
7. Tablet Explosion
Apple iPad Samsung Galaxy SONY VAIO The iPed
Motorola XOOM HP Slate RIM Playbook Cisco Cius
March 15, 2011 Slide 7
8. iPed Now Available on Amazon?
Source: www.amazon.com – February 28, 2011
March 15, 2011 Slide 8
9. The Teardown Specialists
• Technology & Market Assessment • Market Research for Consumer
• Formulate IP Strategy Electronics, Telematics, Semiconductor
• Establish IP Position • Teardown Analysis
• Defend, Leverage IP Business • Device-Specific Application Forecasts
• IP Monetization
March 15, 2011 Slide 9
10. Competitive Analysis
Integrated Packaging
Circuit Design Design
& Layout Analysis
Bill of Device or
Materials & System
Cost Analysis Functionality
Software Fabrication
Reverse Process
Engineering Analysis
March 15, 2011 Slide 10
12. Self-Repair
• Most consumer devices lack
repair instructions or parts
• Offer step-by-step instructions
with photos
• Wiki style approach to repair
manuals with community of
contributors edits
• Guides for Macs, PCs, game
consoles, phones, tablets,
cameras, appliances
• Storefront to sell parts - Apple,
Nintendo, Sony, Microsoft
Source: www.ifixit.com
March 15, 2011 Slide 12
13. Open Source Hardware
• Schematics, bill of materials, Printed
Circuit Board (PCB) layout and
software are released with free and
open source model
• Allow for modification and
redistribution of design files
• Allow manufacture, sale, distribution
and use of devices from design
• Categories include video games,
microprocessors, computer systems,
home energy management
• Services to prototype, manufacturer
and distribute
Source: www.arduino.com
March 15, 2011 Slide 13
14. Growth of Open Source Hardware
Number of Open Source Hardware Projects
• Open Source Hardware
350
market predicted to be
300 $1B in 2015
250 • Over 13 companies
with $1M in revenues,
200 many approaching $5M
150 • Over 200 projects
today, passing 300 in
100 2011
50 • Will it expand beyond
hobbies to commercial
0 hardware?
2006 2007 2008 2009 2010 2011
Source: Make Magazine
March 15, 2011 Slide 14
15. Contract Manufacturer Evolution
HTC - From Contract
Manufacturer to Competitor
Less than 10% of Revenues
are from ODMs
March 15, 2011 Slide 15
17. How to Compete
94% of
Respondents
Agree
Increasingly companies
will compete as much
through superior
processes and service
solutions as through
superior products
Martin Christopher Source: Enhancing Customer-Centric Supply Chains –
SCMWorld (October 2010)
Emeritus Professor
Marketing and Logistics
March 15, 2011 Slide 17
18. Competitive Advantage
Dell
• Just In Time • Vertical • Build-to- • Club Card &
Manufacturing Integration Order POS Data
Sharing
• Kanban • Nearshore • Direct to
Production Consumer • Cross-
• Supplier
Docking
Relationship • POS-Based • Online
Management Replenishment Demand • Factory
Shaping Gate Pricing
Differentiation Comes from Process & Approach
March 15, 2011 Slide 18
19. 2010 – Year of Shortages
Average Lead Times for Components (April 2010)
SRAM 8-16 Weeks
Flash NAND 8-16 Weeks
USB, UART 4-20 Weeks
Capacitors 12-42 Weeks
Connectors 8-16 Weeks
Solid State relais 4-22 Weeks
Discrete 12-26 Weeks
Components
Source: Wall Street Journal (April 2010)
March 15, 2011 Slide 19
21. Kinect In High Demand
Top-selling accessory
item in terms of dollar
sales on a year-to-date
basis
8M units sold in 2010
as compared to 5M
forecasted
1M units sold in first
10 days
March 15, 2011 Slide 21
22. High Tech Channel Checks
Violations of non-disclosure
agreements to share secrets
Apple iPhone forecasts and plans
in exchange for cash
US SEC Arrests four employees of
high tech manufacturers and
expert network consultants for
Insider Trading
http://www.cnbc.com/id/40697535/Four_More_Arrests_Are_Made_In_Federal_Insider_Trading_Probe
March 15, 2011 Slide 22
26. Labor and Human Rights
• Recruitment - foreign workers
who pay excess fees
• Underage - minimum
employment age was 16
• Waste – non-certified hazardous
waste disposal companies
• Overtime –workers exceeded
maximum work weekly limits
• Wages – paid less than
minimum wage for regular
working hours
• Benefits – deficient payments
for sick leave, maternity
• Deductions –of wages for
disciplinary purposes
• Discrimination –pregnancy
tests prior to employment
• Safety – not wearing protective
equipment
March 15, 2011 Slide 26
27. Apple Supplier Code of Conduct
Source: Apple Supplier Responsibility Progress Report 2011
March 15, 2011 Slide 27
28. Importance of CSR
Source: Eye for Transport - High Tech & Electronics State of the Industry Report (2010-2011)
March 15, 2011 Slide 28
30. The Customer Relationship
Customers are Growing Larger
and More Powerful
Buyer Suppliers
March 15, 2011 Slide 30
31. The Key Challenge
Every Large Company Approaches
Supply Chain Processes &
Technologies in a Different Way
Suppliers Must Contend with Rising
Complexity and Customization from
Large Accounts
March 15, 2011 Slide 31
32. Purchase Orders in High Tech
Source: EIDX/CompTIA - Purchase Order Business Fundamentals
March 15, 2011 Slide 32
33. Customer Process Variability
Forecasting Orders Logistics Settlement
Planning Forecast Catalog Order Ship to Factory Supplier Invoice
Confirming Order Ship to Warehouse Self-Billing
Simple Forecast
Spot-Buy PO Ship to Store
Invoice Discounting
Material Release
Blanket PO Drop Ship Receivables Factoring
Schedule
Evergreen Order Home Delivery Supply Chain Finance
Consumption Standing PO
Merge-in-Transit Open Account
Schedule
Build-to-Order Consolidation Letter of Credit
Order Forecast Configure-to-Order Documentary
Cross-Docking
Collection
Mix/Aggregation Drop Ship Order
Late Stage
Forecast Debit Transfer
Internal Order Configuration &
Credit Transfer
Delivery Forecast Postponement
Work Order Wire Transfer
Rolling Forecast Job Order Procurement Card
Service Order Cheque
Build Plan
Repair Order
Warranty Order
March 15, 2011 Slide 33
35. Quest for Efficiency
Buyer’s View Supplier’s View
Electronics Retailer
One Many
Standardised Customized
Supply Chain Supply Chain
Processes & Processes &
Technology Technologies
OEM 1 OEM 2 OEM 3
For each How many
Supplier Supplier Supplier Supplier Supplier
Euro of are lost on
costs saved customer
on standard- facing
isation complexity?
Lower Tier Suppliers
March 15, 2011 Slide 35
36. Two Views on Complexity
Challenge Opportunity
March 15, 2011 Slide 36
37. Differentiating with B2B
89% of Respondents
Agreed that
Flexibility of our B2B e-
Commerce program Enables
us to Differentiate from
Competitors on Service
March 15, 2011 Slide 37
38. Questions
Steve Keifer
Vice President
Product & Industry Marketing
http://blogs.gxs.com/keifers
Twitter: @EDInomics
March 15, 2011 Slide 38