Looking Forward to the Next Round of Innovation

I was surprised by a number of conversations I had while at this years CES. More than once the conversation turned to the staleness of innovation shown at the show. It is true there wasn’t too much to get excited about this year, but the remarks I heard seemed to indicate that there is a belief that we may be headed for a period where innovation is stagnant. I have to say that I disagree.

On Monday I wrote in my column about why I believe the PC landscape is about to change. I pointed out that the barrier to entry to create consumer electronics has dropped to an all time low. Making it feasible for any company with enough cash and a market strategy to start creating electronics of all shapes and sizes. My overall point was that consumer electronics is ripe for new entrants. More specifically new entrants with fresh ideas.

That being said we have to look at innovation as pillars. There is hardware innovation, software innovation, and services innovation. One could also throw in experience innovation as a pillar as well but it is intertwined with hardware, software, and services. Each of these pillars feed off each other and spur parallel innovations.

There are countless examples of how this chain of events works. We could look at examples from the first land line phones, to the PC, to the smart phone and more. However I am going to use the iPad as an example.

The iPad was a hardware innovation (not a conceptual innovation) that integrated all the right pieces of hardware into a touch computing package. The iPad then set in motion the opportunity for software innovation and eventually we will see more innovation in services as well. This leads us to what we can expect in this next round of innovation. Namely that it will come more from the software and services pillars.

This is not to say there will be zero hardware innovation. I simply believe we will see more innovation come from software and services which will take advantage of the hardware platforms that gain mass market attraction. Namely around devices like the PC, tablet, smart phone, and TV. All of those devices represent the platforms of the future. So although we will see some hardware advancements in those devices I don’t believe they will be monumental but more incremental. Screens will get better, semiconductors will get faster, devices will be go through design evolution, etc.

All those hardware platform innovations will continue to lead to new software, services, and experience innovation. Take yesterday’s news from Apple about iBooks 2.0 and the new interactive e-book experience. Tim stated that Apple just re-invented the book and he is right. The point that needs to be made, however, is that without the iPad and the platform innovation of tablets, it would never have been possible to even think about re-inventing the book. The hardware innovation created this possibility. Tim also rightly pointed out that if publishers are not careful they could be disrupted quite easily. The hardware platform innovation leads to not just the re-birth of something like a book but the re-birth of the publishing industry. This can also be said of the music industry, motion pictures, network TV, magazine, and perhaps even government or politics? All of these industries have the opportunity to re-invent themselves in light of new and innovative hardware.

The opportunities will be endless, and again, I am not saying that hardware innovation is dead, perhaps only that it is cyclical. The next cycle of innovation will be more focused on software and services rather than ground breaking new hardware. We could discuss new computing hardware like the smart watch, automobile and more, but perhaps those are more extensions of existing platforms rather than platforms themselves. I will leave that topic for another column.