Why Hardware, and CES, Still Matter

by Steve Wildstrom   |   January 10th, 2013

DEC system board (Wikipedia)An odd notion that hardware no longer matters has lately taken hold in the world of tech commentary. For example, in a well-argued piece explaining his decision not to attend the Consumer Electronics Show, Buzzfeed’s Matt Buchanan  writes:

[S]oftware and services have become the soul of consumer technology. Hardware (seriously doesn’t the word “electronics” in the conference’s dusty title make your eyes instantly droop a bit?) has become increasingly commoditized into blank vessels that do little more than hold Facebook and Twitter and the App Store and Android and iOS. And the best and most interesting vessels, increasingly, are made by the very companies making the software.

It’s true that the relationship between software and hardware is changing, but this is happening in much more complicated and interesting ways. If hardware were a pure commodity, sales of phones, tablets, and PCs would behave the way commodity markets do, with all business flowing to the lowest cost  and no-name Chinese manufactures of good enough handsets, tablets, and PCs dominating even in advanced economies. Instead, the premium producers, especially Apple and Samsung, are winning. (Samsung makes lots of low-end phones, but it is enjoying its greatest success with its top-of-the-line products.)

What is happening is that hardware and software are becoming more and more integrated, to the point where it is difficult to tell where one ends and the other begins. This integration is at the heart of Apple’s success and the need for it is driving Google and Microsoft into the hardware business and may push Samsung to break with Google’s control of Android or to develop an alternative to it.

The integration of hardware and software also makes the meme started by Google’s Eric Schmidt and repeated by many others, that the only companies that really matter to consumers are Apple, Amazon, Google, and Facebook. Of these four, only Apple comes anywhere close to full vertical integration. All of them depend on a sprawling infrastructure of companies, including Intel, Qualcomm, Nvidia, and ARM Holdings, that design the non-commoditized components on which everything else depends. These companies, as it happens, were very well represented at CES.

Tech is a complicated business. But the tech commentariat is hopelessly addicted to simpleminded generalities. The consumers of punditry would be better served if we all stopped to think a bit more.

Steve Wildstrom

Steve Wildstrom is veteran technology reporter, writer, and analyst based in the Washington, D.C. area. He created and wrote BusinessWeek’s Technology & You column for 15 years. Since leaving BusinessWeek in the fall of 2009, he has written his own blog, Wildstrom on Tech and has contributed to corporate blogs, including those of Cisco and AMD and also consults for major technology companies.
  • jfutral

    Yeah, to think hardware doesn’t matter is a bit of an odd statement. It is an overstatement, but the underlying notion (which is being misrepresented) is the idea that hardware is not the central or isolated focus it used to be.

    In the ballet world there has been much discussion about how technique is now so refined and virtuosic that choreography hasn’t been able to keep up. All those things that Baryshnikov used to be such an anomaly about, now many dancers do regularly. No one is putting out the choreography that really uses that kind of technical level.

    Relating that to technology, there aren’t that many people creating software solutions (choreography) that can take full advantage of the hardware (technique) to compellingly serve the audience (audience), at least on the scale Schmidt is talking about.

    But decentralization is happening everywhere. Monolithic geographies (physical, like NYC, or metaphoric, like Apple, MS, or Google) aren’t as important anymore. What is more important is the proliferation of the smaller offerings (the multitude of apps, like Ben once wrote about, I think, regarding how Apple has put a renewed (?) focus on software, that a single vendor could not provide even if they had the personnel.

    Joe

  • http://www.facebook.com/profile.php?id=1573495479 Rene Stein

    Hardware is essential, but it has lost the buzz that it used to have. For the most part, we now are dealing in excess in the hardware world, hence the iPad Mini is good enough with year old internals. Very few regular consumers care too much about the latest and greatest in processor technology. And, when you look at a typical smart phone, they all have lots of processing power and all kinds of sensors. In fact, it is hard to imagine what new sensors or hardware technology could be incorporated.

    But perhaps, this is really more of a reflection on the market. The majority of the computer market in the 80s and 90s were technology folks who understood hardware and got excited about new and unusual things. Now, the market is mostly regular people who don’t know an integer unit from a floating point unit. They don’t care much about the underlying hardware. So, it won’t generate much buzz.

    Also, there are very few hardware makers, but millions of software vendors vying for attention. So, of course, software is going to attract more attention.

    Again, hardware is not sold directly to the regular consumer. It is put together into a final product and sold as a black box to the computer that runs software. Users mostly just interact with the software.

    Just a few ideas.

  • http://twitter.com/M_Gauche James King

    In a perfect world, people would understand the symbioses of technologies that make up the computing landscape. Software would be developed from the top down, not the bottom up, with UI/UX designers committing to building user interfaces based on scientific principles like Fitt’s Law instead of personal preference. Software engineers would then use the best programming languages and techniques to build software that is largely bug-free and optimized for re-usability. This work would then be presented on hardware that is designed with simplicity, aesthetics, ease of manufacturing and ease of maintainability at the forefront. In the end, products would be produced that truly simplified people’s lives and we would spend LESS time in our gadgets and more time doing interesting things ENABLED by our technology.

    But in our profit-driven world, that largely isn’t the case. Products are iterated to death and we seem to never get to the point that technology makes our lives simpler. We haven’t found the balance between simplicity and diversity of options and are inundated with too many choices, the majority of them mediocre. We waste a lot of time just finding the right solutions and, when we do, they often aren’t the COMPLETE solutions. Technology has made us more efficient in some ways but at the price of committing much of our lives to the very devices that should be simplifying them.

    When one aspect of technology is marginalized for another, we put ourselves into a spiraling cycle. ALL aspects of technology should be respected and pursued as equal parts to a greater, better whole. But sometimes people with short-sighted views are allowed to dominate the dialogue because most don’t truly understand how all of the pieces fit together.

    I think the writers on Tech.pinions generally present a balanced approach and are knowledgeable regarding the totality of the tech experience. I wish most of the tech media presented information the way that this site does … in a non-sensational way that encourages people to consider how the newest tech trends are going to affect their user habits. So keep up the great work because I, for one, appreciate it.