R&D

A final word about the CNT disruption

In order to assess the ability to respond to the disruption of CNT technology, I have prepared a box score for vulnerability to potential disruptive threat assessment below. The resulting conclusion is that costs are the biggest factor affecting the semiconductor industries ability to react. As mentioned in question 1, the high costs associated with R&D and manufacturing in the semiconductor industry means that current facilities need to be planned well ahead of time. Uncertainty, risk, and complexity also make semiconductor road mapping tricky business. Box Score for vulnerability to disruptive technology threat – Semiconductor Manufacturing Firms Denial – 0 History – 0 Resistance to Change – 0 Mind Set – 0 Brand – 0 Sunk Costs – 10 Profitability – 10 Lack of Imagination – 0 The factors I will discuss therefore are: (1) costs and (2) uncertainty. Sunk costs problem implies that firms will not want to migrate…

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More about the CNT Disruption

The industry I have chosen to investigate, and claim will be a big disruption in the future – although it isn’t poised for market yet – is the carbon nanotube (CNT) processor. Carbon nano technology was highlighted as a disruptive technology in a May 2013 report from McKinsey Quarterly (Manyika, 2013). The reason I believe it will be disruptive is because carbon nano processors have the potential to be much more energy efficient and compact (per processing capacity) than silicon based transistors. The infamous Moore’s Law has accurately predicted the improvements of silicon based semiconductor technology since it was stated by Moore in 1965 (Moore, 1965). While 9nm silicon chips are manufactured today, the the inherent quantum limitations posed by silicon-based semiconductor technology threaten to cause the development pace to drop below Moore’s expected level of improvement by 2020 at the 7nm scale (Merritt, 2013). On the other hand, a…

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In order to ‘catch the wave’ of CNT technology, firms in the semiconductor industry will need to morph their business model to accommodate competition and new opportunities. The reason that I say “morph” the business model, instead of radically change it, is because the shift to CNT from silicon is not here yet, it is a long process forthcoming, and the shift will entail many years of extensive forecasting and planning. The stakes are high for semiconductor developers and manufacturers, so a careful balance between maintaining strong revenue streams, and investing it into R&D is more realistic strategy than a ‘flip the switch’ type of strategy. Although it is less likely that a new player will suddenly emerge onto the field and eat lunches (like Netflix is doing in online media) because of the high barrier to entry, patent activity should be carefully monitored and assessed to judge the relative…

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Why Netflix has kicked ass

I propose three main reasons for Netflix rapid growth: (1) broad device and software architecture support, (2) contracts with top content producers, and (3) optimal timing with respect to scaling, product deployment and technology road mapping. I will outline the ways these three factors have contributed to Netflix growth below. 1. Broad device and software architecture support Netlflix supports a huge range of devices and operating systems. The astounding list includes: Windows and OSX, , ChromeOS, iOS, Android, and Windows Phone, Amazon Kindle, and Nook, which pretty much rounds out the entire PC, notebook, smartphone, and tablet markets. Netflix was also able to secure streaming capabilities in a wide array of Blue-ray players, and smart TV’s and set-top-boxes. Once you include XBox, Playstation, Nintendo Wii, 3D, WiiU, TiVO and Boxee, it’s hard to find a digital device that doesn’t support Netflix. Forbes reports that Playstation is the most used device…

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What are the big TV networks scared of most?

Major TV networks in several cases have been acquired by or merged with cable providers. Their business model is heavily integrated with cable and internet service. With respect to internet technology, their biggest fear may be the realization of a technology race coined “The Last Mile” (Cordeiro, 2003). The goal of ‘the last mile’ is for telecoms to deliver broadband wireless internet to homes. Intel had plans to help make that happen with WiMax but luckily for ISP’s have come up short so far. If telecoms were to successfully develop a superior last mile solution, consumers may switch from Comcast or AOL cable internet to Verizon or AT&T. So, wireless broadband is a potentially disruptive technology for cable service providers (Goodwins, 2005; The Economist 2002). With respect to online video content being a disruptive technology, TV networks biggest fear may that global broadband penetration, significant improvements in broadband speeds and…

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Regression Analysis of Software-Litigation vs Patenting Activity

Here are the results of a regression comparison of all software litigation and all software patenting activity since 2000. The results show correlation which could be described as somewhere between moderate and strong. The resulting Peason’s R value for this study is 0.5193. The purpose of doing this regression study is to prove some correlation between litigation and R&D expenditure. Patent grants issued are not a direct measure of R&D expenditure, because patents costs different amounts to produce in different industries. However, these are all software-related classes, and so correlation between grants issued and R&D expenditure should be stronger than when measuring all UPC classes for the whole USPTO. PastedGraphic-1.pdf

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Hon Hai Accumulating Intelligent Auto Patents

Luxgen is a new Taiwanese independent auto brand seeking to grow and add market share in Taiwan and abroad. Luxgen has shown propensity towards selling intelligent automobiles in a global market. More broadly, in the US autonomous vehicles have been licensed for testing in two US states to date, and Google’s Sergey Brin has publically predicted that autonomous vehicles will be ready for market in 5 years. Luxgen is owned by parent company Hon Hai Precision Industry Ltd. Hon Hai has started to accumulate patents related to autonomous vehicles starting in 2010 and their transportation related patent awards and their details are below in Figure 2 and Table 4. Secondly, top litigated software UPC classes for 2012 include several classes related to transportation technology. These litigation trends indicate that technological innovation in the transportation industry is high-value at this time. Figure: Hon Hai Transportation Related Patent Grants by Award Year…

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    Click on the image below to see the full report:   Link to Annual Report of Software Patent Litigation for 2012: https://www.ripplesoftware.ca/wp-content/uploads/2013/03/annual-report-data-1.jpg Link to PwC 2012 M&A Outlook: http://www.pwc.com/en_US/us/transaction-services/publications/assets/pwc-technology-mergers-acquisitions-q4-2011-outlook.pdf Link to PwC 2012 Patent Litigation Report: http://www.pwc.com/en_US/us/forensic-services/publications/assets/2012-patent-litigation-study.pdf Link to PwC 2012 China M&A Outlook: http://www.pwcblogs.be/transactions/wp-content/uploads/2012/09/2012-China-MA-Review-and-Outlook.pdf

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Technology cycle time is a measure of the pace of technological turnover by measuring the average age of patent citations. The following table shows the UPC subclasses with the fastest moving TCT for 2010. Only subclasses that have received at least 100 patent grants during 2010 are included. Results show communications IT, big data, vehicles navigation, computer conferencing constitute most of the classes.

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Auto Maker Patenting Since 2007

Which of the top automakers is leading the software patenting charge towards autonomous vehicles? This chart shows which automakers have been acquiring patents since 2007. Looks like Honda and GM are really collecting the most patents with Nissan in the number 3 position. Expectedly data processing for vehicle navigation is by far the run-away top software UPC for patenting by most auto makers.

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