The Magic Inside Your Devices

Sometimes, it’s what’s inside that counts more than what we can see on the outside. That’s certainly the case with people, and increasingly, I think, it’s going to be the case with tech devices.

Many of the most impressive breakthroughs in our favorite gadgets are driven almost completely by critical new breakthroughs in component technologies: chips and other semiconductors, displays, sensors, and much more. Just this week, in fact, there were reports that Apple might offer a curved display on next year’s iPhone, and that HP Enterprise had debuted the first working prototype of a dramatically different type of computing device that they dub The Machine.

In both cases, it’s critical component technologies that are enabling these potentially breakthrough end products. In the iPhone’s case, it would be because of bendable OLED displays being produced by companies such as LG Display and Samsung Electronics’ display division. For The Machine, HP’s own new memory and optical interconnect chips are the key enablers for computing performance that’s touted to be as much as 8,000 times faster than today’s offerings.

Long-time tech industry observers know that the real trick to figuring out where product trends are going is to find out what the most important component technologies being developed are, then learn about them and their timeline for introduction. That isn’t always as easy as it sounds, however, because semiconductor and other component technologies can get very complicated, very quickly.

Still, there’s no better way to find out the future of tech products and industry trends than to dive into the component market headfirst. Fortunately, many major tech component vendors are starting to make this easier for non-engineers, because they’ve recognized the importance of telling their stories and explaining the unique value of their products and key technologies.

From companies like Sandisk describing the performance and lifetime benefits of solid state drives (SSDs) inside PCs, to chipmakers like nVidia describing the work in artificial intelligence (AI) that GPUs can achieve, we’re starting to see a lot more public efforts to educate even dedicated consumers, as well as investors and other interested observers, to the benefits of critical component technologies.

Given the increasing maturity and stabilization of many popular tech product categories, I believe we’re going to start seeing an increased emphasis on changes to the “insides” of popular devices. Sure, we’ll eventually see radical outward-facing form factor changes such as smartphones with screens you fold and unfold, but those will only happen once we know that the necessary bendable components can be mass produced.[pullquote]Given the increasing maturity and stabilization of many popular tech product categories, I believe we’re going to start seeing an increased emphasis on changes to the “insides” of popular devices.”[/pullquote]

Of course, the ideas behind what I’m describing aren’t new. Starting in the early 1990s and running for many years, chip maker Intel ran an advertising campaign built around the phrase “Intel Inside” to build brand recognition and value for its CPUs, or central processing units–the hidden “brains” inside many of our popular devices.

The idea was to create what is now commonly called an ingredient brand—a critical component, but not a complete, standalone product. The message Intel was able to deliver (and that still resonates today) is that critical components—even though you typically never see them—can have a big influence on the end device’s quality, just as ingredients in a dish can have a large influence on how it ultimately tastes.

Since then, many other semiconductor chip, component and technology licensing companies (think Dolby for audio or ARM for low-power processors, for example) have done their own variations on this theme to build improved perceptions both of their products and the products that use them. Chip companies like AMD, Qualcomm, and many others, are also working to build stronger and more widely recognized brands that are associated with important, but understandable technology benefits.

Most consumers will never buy products directly from these and other major component companies. However, as tech product cycles lengthen and industry maturity leads to slower changes in basic device shapes and sizes, consumers will start to base more of their final product purchase decisions on the ingredients from which those products are made.

Published by

Bob O'Donnell

Bob O’Donnell is the president and chief analyst of TECHnalysis Research, LLC a technology consulting and market research firm that provides strategic consulting and market research services to the technology industry and professional financial community. You can follow him on Twitter @bobodtech.

1,219 thoughts on “The Magic Inside Your Devices”

  1. I hope you are not advocating the “Intel Inside” campaign or the ugly and ultimately counter-productive “megahertz race” that followed. The multi-core race of mid-range smartphones is already bad enough.

    1. That was all marketing’s fault, and but one example that everything needs to be viewed with some suspicion and judged critically.

      For instance, for a given architecture, more MHz was faster. That did not necessarily translate when other performance criteria weren’t fixed.

      1. The way I see it, marketing has two roles.

        One, as Steve Jobs put it, is to educate the customer.

        The other is to distract the customer away from what really matters, and towards what your product uniquely provides.

        The distinction is not always clear since companies often may not yet understand what really matters to the customer. Sometimes distraction is intentional. Often it’s not.

        Ingredient branding, in my opinion, is very often the latter, distraction form of marketing.

        1. Marketing is also positioning, and deciding what goods to launch and in which order. This is something Apple is very good at.

        2. That’s marcomm, the last of the 4 Ps that make up marketing: Product (as in features/design), price, placement (distribution), promotion (advertising).

    2. Actually, what I’m saying is I think we will start to see more efforts conceptually similar to Intel Inside as the focus moves away from external design and toward internal tech improvements.

      1. Agree that this is often the case. The Huawei P9 with Leica branded optics is just one example.

        My understanding of the Intel Inside campaign is that this was in response to AMD eating into the low-end CPU market. CPU performance was already good enough for many users, and they were steering towards the low cost options. Intel needed a way to differentiate through branding, because performance alone was not enough to do so.

        Likewise, I consider the rise of ingredient branding to be a result of maturation and good enough performance (lack of true innovation). When the performance differentiation is large enough and noticeable, you just don’t need ingredient branding.

        Ingredient branding always tends to be dubious in terms of end user benefits. This is true for foods also. If this does indeed become a trend, I think it signals a lack of true innovation more than anything.

        1. “Intel Inside” was mostly a kick-back campaign to entice OEMs to not have any AMD CPUs in their lineups. The end-user part of it was rather incidental, maybe just a straight cover-up.

          Very few pure parts companies manage to get branding in the general public. Shimano comes to mind, close to you ^^ Leica got its branding from its own devices. Ditto Sony for its smartphone camera optics (and that’s pushing the definition of “general public”.

          Related but different from ingredient branding, we might get feature branding. The main issue is that end-product makers have 0 incentive to advertise a component that will find its way into competitors’ products. I don’t remember what Apple calls its security subsystem, but it’s more-or-less a straight implementation of ARM’s Secure Enclave, but no OEM has much stake in advertising ARM’s tech. I’m fairly sure Huawei got an exclusive with Leica, or they wouldn’t push that branding so much. Intel had plenty of money to burn from being in practice a monopoly. We’ll see if Qualcomm manages to brand their ultrasound touchID, they kind of pulled it off with QuickCharge.

          1. “I don’t remember what Apple calls its security subsystem,”

            Actually, it is also called Secure Enclave

        2. Intel Inside style ingredient branding sounds to me a lot like drug manufacturers advertising directly to patients. Exploit the customer’s lack of expertise on the matter and convince him that he’s just got to have Intel inside, or some new-fangled patented diabetes drug, because if he goes with the cheap alternative something really horrible will happen to him.

          1. In Japan, directly advertising to patients is illegal except for simple drugs for common cold, stomach aches etc. For the reasons you cite apparently.

    1. Yes, interesting timing. But the key point even from that piece is that the focus is on the components developed to enable it, which is essentially what I was making the argument for in my column.

  2. Everything you said supports the notion of the huge benefit of modular, upgradable systems over monolithic one’s.

    -It’s easier to stay current
    -It delays obsolesce (much to the chagrin of company supporters)
    -It makes hardware less monolithic, more fluid and changeable, like software is.
    -Computers were always magical, not just when Jobs proclaimed the iPad to be magical. As a monolithic system, it’s actually less magical.

    1. Modular will always lead to an inferior overall expereince, on top of the business model challenges it has competitively. There will always be a place for it but as I’ve pointed out before, there is a reason once modular ecosystems swing back to integrated.

      1. That’s a statement, not a proof. It’s your opinion and your preference.

        As a consumer, I offered why modular is better.

        I cannot buy a Mac to match my PC at any price, never mind the huge delta.

          1. No need to be partisan. Smartphones and tablets are less modular than PCs to which I’m referring. It’s also why I personally like them less.

            But since you bring up Google (as a provider of but one part of modular devices, the OS) and having multiple vendors and models from which to choose, the ecosystem does indeed offer more modularity than iOS. SD card slots alone are proof, removable batteries on other models as well. Same for whatever there is of Windows Mobile.

            Just because I’m “anti-Apple” does not make me a fan of Google or anyone.

          2. I didn’t bring up Google because I thought you were a fan of Google. I used it as one of the first examples that came to my mind as a way showing that modular devices, in the consumer space, isn’t what it’s cracked up to be.

          3. Fair enough, but it’s an unfair comparison to even bring up mobile in the context of modularity, regardless of platform. Yes, I’m saying desktop is better than laptop which is better than mobile in terms of capability (other than mobility).
            Then content also includes software and other non-hardware content, and that’s a whole other can of worms…

          4. I don’t think we can generalize so sweepingly. Modular is better for some products, for some use cases, and worse for others. Modularity introduces constraints and tradeoffs that are in some situations easy to gloss over, in others real sticking points.

            I bought my table specifically because it could extend to fit more people, and my den sofa because it could morph into a an extra bed, and my stereo because it has separate elements I could mix, match and upgrade at will. That’s “consumer modular”.

            I think tablets and phones have specifc issue re: modularity: a) takes more room b) mars the aesthetics and c) isn’t standardized, so modules end up being expensive single-device doodads. Maybe we’ll reach a point were those constraints become palatable, or are alleviated. I don’t think Tango is a good counter-example, because it was even more modular than a PC… that was a rather crazy engineering brag project… pre-Alphabet Google.

            Side note: I’m actually surprised we haven’t had a “mobile Dell”, with JIT mass customization in-factory (aside Moto’s custom colors/materials). I understand there are challenges, but I’d love a choice of battery size/thickness, not only size. We might be moving owards it a bit though: I’m 99% sure my Xiaomi Mi Max is a Redmi Note 3 Pro w/ a bigger screen and battery. All specs match, anyway, though I don’t dare swap firmwares ^^

          5. You can get Lightning SD card readers if you want, and you can add battery cases or packs. It’s a different approach, but as technology moves along the path of abstraction we actually move back towards modularity, just in a different way than you’re used to. But it’s still modular, the way I can use so many useful third party accessories with Apple gear.

            You mention Google as being a provider of one part of modular devices (the OS), but why not go further and split the OS into more pieces? On some level everything is modular, but it does make sense to encapsulate specific elements as whole enclosed pieces. The argument is really where you decide to encapsulate, not whether one system is modular or not.

          6. Yes you can get Lightening SD reader, but you are bound by the OS. Non-access to the file system limits them. Use by any purpose other than what was pre-ordained is not really facile or possible.

            Split the OS further…
            Good idea. Anyone that compiles their own Linux (or *nix) kernel does exactly what you suggest. I agree with you. In a sense the driver model of Windows is what allows it to support the universe of hardware as well.

          7. So we’re agreed that both systems are modular and it is only the approach and details of how elements are encapsulated that differ. Android’s approach to modularity works better for you and affords you more freedom. Apple’s approach to modularity works better for me and affords me more freedom.

      2. Modular worked really well for desktop PCs, many people were able to build those themselves. It worked far less for laptop PCs, nobody built those themselves and people mainly updated hard drives and RAM. With mobile devices the is little benefit to a modular approach because:
        1) power and space are at such a premium.
        2) all the components wear out or go obsolete at about the same time.
        3) only a tiny fraction of mobile users has the technical chops to do any upgrading.

  3. “Just this week, in fact, there were reports that Apple might offer a curved display on next year’s iPhone”… On a related note, 2 years ago, there were reports that Samsung had started delivering a curved display on its Edge series… but that’s outside the bubble, I guess…

      1. I’d be impressed if they manage to combine LG’s whole-screen length-wise curve with Samsung’s “bit on the sides” curve. Are stretchable displays next ? ;-p

        1. The iPhone 6 slavishly copied it that the same year, but the curvature had to be customer produced and had a kink near the power button. 😉