Since their inception, PCs have been a disruptive product, sweeping away the old order and ushering in revolutionary changes in information technology (IT). But now, PC OEMs have their sights set on an area beyond IT, toward consumer electronics. According to iSuppli Corp., the result will be a complete disruption of the market's status quo.
For the PC suppliers, consumer electronics offers an opportunity for growth (see the figure). Gateway Inc. and Dell Inc. have made huge gains in consumer electronics over the past year by selling such products as digital still cameras (DSCs) and plasma televisions. These PC makers are outsourcing consumer-electronics equipment production to Chinese OEMs and Taiwanese original design manufacturers (ODMs). This has caused a major change in the consumer electronics supply chain.
The long-dominant Japanese consumer electronics OEMs design their own products and primarily use internally sourced components. In contrast, the Asian OEMs/ODMs have no internal sources of supply for such components, making them more open to solutions from third-party semiconductor suppliers. They also require more comprehensive support from their semiconductor suppliers, including complete reference designs, software tools, drivers, and application support. As a result, the center of product design in the consumer electronics market will shift from the OEMs to the semiconductor makers.
The PC companies are expected to increase their presence in consumer electronics as the market's focus shifts to broadband, home networking, and software, areas where companies can add value and differentiation to products. The plethora of communications standards that will be required to support broadband will spur the Asian OEMs/ODMs to source flexible semiconductor solutions. Consumer electronics OEMs and ODMs need to partner with semiconductor suppliers who can offer the kinds of programmable devices needed to succeed in the broadband world.
In the new era of PC-OEM participation, consumer electronics designers will have to navigate a new supply chain, stay on top of networking- and software-driven product trends, and identify the right semiconductor suppliers to win, iSuppli predicts.
iSuppli Corp.
www.isuppli.com
Since their inception, PCs have been a disruptive product, sweeping away the old order and ushering in revolutionary changes in information technology (IT). But now, PC OEMs have their sights set on an area beyond IT, toward consumer electronics. According to iSuppli Corp., the result will be a complete disruption of the market's status quo.
For the PC suppliers, consumer electronics offers an opportunity for growth (see the figure). Gateway Inc. and Dell Inc. have made huge gains in consumer electronics over the past year by selling such products as digital still cameras (DSCs) and plasma televisions. These PC makers are outsourcing consumer-electronics equipment production to Chinese OEMs and Taiwanese original design manufacturers (ODMs). This has caused a major change in the consumer electronics supply chain.
The long-dominant Japanese consumer electronics OEMs design their own products and primarily use internally sourced components. In contrast, the Asian OEMs/ODMs have no internal sources of supply for such components, making them more open to solutions from third-party semiconductor suppliers. They also require more comprehensive support from their semiconductor suppliers, including complete reference designs, software tools, drivers, and application support. As a result, the center of product design in the consumer electronics market will shift from the OEMs to the semiconductor makers.
The PC companies are expected to increase their presence in consumer electronics as the market's focus shifts to broadband, home networking, and software, areas where companies can add value and differentiation to products. The plethora of communications standards that will be required to support broadband will spur the Asian OEMs/ODMs to source flexible semiconductor solutions. Consumer electronics OEMs and ODMs need to partner with semiconductor suppliers who can offer the kinds of programmable devices needed to succeed in the broadband world.
In the new era of PC-OEM participation, consumer electronics designers will have to navigate a new supply chain, stay on top of networking- and software-driven product trends, and identify the right semiconductor suppliers to win, iSuppli predicts.
iSuppli Corp.
www.isuppli.com