Surfing the Digital Consumer Wave in
Technology
Atiq Raza
Chairman and CEO
Raza Microelectronics, Inc.
atiq@razamicroelectronics.com
Waves, Tides and Tsunamis
There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
On such a full sea are we now afloat,
And we must take the current when it serves,
Or lose our ventures.
William Shakespeare
“There’s wind and
then there is a typhoon,
there are waves and
then there’s a tsunami!
Such a strategic inflection point [is]
characterized by a ‘10X’ change …”
Andy Grove
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Surfing the Technology Waves is Not Easy
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Digital Transformations
Broadband Communication and Information Processing
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VCR to DVD: Digital Transformation
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Digital TV Shipments in Japan
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Cameras: Analog to Digital Transformation
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Digital Consumer Market
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Makimoto's Waves - Sony View of Technology
• Compute processors drove the first wave
• • Running
Simplified
Atiqforplus
original
out of steam
the second
wave
graphic
Compute
Processors
Next Generation
Processors
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Digital Consumer Lifestyle
Home
Minivans and SUV
Master
Bedroom
Kids Bedroom
Kitchen
Study
TV Gateway
Family
Room
Copyright© 2004. MIPS Technologies, Inc. All rights reserved.
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The Digital Consumer and the Digital Home
• Entertainment
– Passive with Higher Quality Experience – Television, Music, Radio
– Interactive with Premium on Gratification – Games, Browsing on the web
• Information Access
– Work Related
– Unrelated to Work
• Comfortable and Safe Living
– Environmental Control
– Security
– Remote control and management
• Minivans and SUVs gain Home Attributes
– Television, Music, Radio
– Gaming
– Cell Phone with rich features
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The Digital Home - Future
• Multimedia content
• Rich experience
Entertainment &
Information
Broadcast (RF)
Internet
Home Network
• Wireless (802.11 a/g/n/e, UWB)
• Wired (Ethernet, phone line, power line)
• Digital (DVI, HDCP, USB, 1394)
• RF (broadcast)
12
Consumers and Home Network
• Home is primarily a Languorous Interactive Environment
• Digital Content is much more Important than Home Automation
• Distributed Control – TIVO, Environment, Security Systems
• Limited Automation and Autonomy in Home Controllers
• PC penetration in US Homes is 65%
• PC as Central Controller for Digital Home is less than 5%
• Driver for Home Networking is connecting multiple PCs
• Wireless Connectivity will be ubiquitous when it can deliver HDTV
• Ideal Control for Home will come through Learning Tools
• Global explosion in Digital Consumer Product Demand
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Global Economic Transformation
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Globalization – Emerging Markets
RUSSIA
CHINA
INDIA
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China’s and India’s Growing Middle Class
This
advertisingfilled Shanghai
street
exemplifies the
growth from
China's
economic
reforms.
The Ansal Plaza
shopping mall in
New Delhi
features
a McDonalds and
Nike, Reebok,
Burberry's and
Gucci brand
products.
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Semiconductor Revenue Shipments by Geography
40%
35%
Asia Pacific
Americas
Europe
Japan
30%
25%
20%
15%
1999
2000
2001
2002
2003
2004
Source: SIA
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Digital Consumer Market Economics
•
•
•
•
•
Richness of Experience Drives Customer Demand
Content sustains Customer Demand
Standards propel proliferation – MP3, MPEG, 802.11, VHS, etc.
Standards enable multiple Vendors and Brutal Competition
Consumer Products have enabled Affordable Usage Model
– Digital Camera chips, 802.11, Bluetooth
• Overall winning model is the Razor-blade model
– DVDs, Digital Gaming Systems, Digital Cameras, Inkjet Cartridges, Cable/Sat TV
• Consumer Content and Services create Profits as Dessert
– EBay, Google, Sony, Movies, Music, Games
• Opportunities for Start-up wins in Consumer Products
– Atheros, Cambridge Silicon Radio, Portalplayer
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Start-up Opportunities and Market Segments

Market Segments defined by Product or Service, Technology, Sales Channels, Customers

Large Companies “Goliaths” have Franchises but cannot react rapidly to Market Changes

Start-ups have to offer “Disruptive Products” that are Aligned with Emerging Market Requirements
Goliaths with Franchises
Emerging Market Directions
Adjacent
Segment
New
Product
Adjacent
Segment

Start-ups can only be Successful by Product and Sales Execution in Target Segments

Start-ups Grow by expanding to Adjacent Segments
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David and Goliath
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Nasdaq Tsunami was Followed by Undertow
January 1983 - Present
5,000
4,500
4,000
Doubles in 1 year
3,500
3,000
Doubles in 2 years
2,500
Doubles in 4 years
Doubles in 8 years
2,000
1,500
1,000
500
0
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Venture Investments
24
Waves and Riptide Co-Exist
25
Where VCs are Investing
Forbes
• Nanotechnology
• PC-TV-Web Convergence
• Open Source Software
• Medical Devices
• Software-Hardware Integrated
KPCB Focus
• Personalized Medicine
• Consumer Devices and Services
• Wireless Devices and Services
• Clean Power, Water and Transportation
• The “New Enterprise”
Sequoia
• Components
• Systems
• Software
• Services
Benchmark
• Enterprise Software and Services
• Communications and Security
• Semiconductors
• Mobile Computing
• Consumer Services
• Financial Services
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Innovation + Rapid Execution = Success
Focus
Start-ups
Rapid Execution
Goliaths
Creativity
Improvements
Breakthroughs
27
Sources of Technology Innovation
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Cost-Effective Innovation on a Global Scale
Management
Innovation
Education
Research
Infrastructure
Discipline
Organization
Management
Innovation
Education
Research
Infrastructure
Discipline
Organization
Integration
Management
Innovation
Education
Research
Infrastructure
Discipline
Organization
Management
Innovation
Education
Research
Infrastructure
Discipline
Organization
29
Recipe for Success
• Identify Emerging Opportunities
– WiMax, UWB, HDTV, Enhanced Media over WiFi, etc.
• Develop Jaw-dropping Value Proposition through Innovation
• Develop a Strategic Base of Support for Product
– Large Customers, Major Technology Partners
• Place emphasis on low Cost-of-Goods
• Cost-effective Product Development
• Global Markets
• Flawless Execution to intercept Emerging Opportunity
• Price the Products to enable Rapid Growth
• Surf the Huge Digital Consumer Wave
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Technology Waves – Successful Surfer
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