Just read an interesting post about designing products with a hardware component as opposed to only software as a way to improve success with high volume consumer products.
Key points were:
- Hardware products allow for better margin
- More players can coexist in a market that is hardware-based
- Readily accessible offshore manufacturing is making it easier to compete on cost
- Break-even can happen faster that with software-only plays
Patents do allow hardware to be a barrier to entry and as such, bolster this argument. On the other hand if a consumer product is truly successful, clones are sure to emerge.
In working with industrial companies I see a slightly different dynamic, most likely due to the higher cost of products sold to OEMs and Corporations as opposed to consumers.
In this market:
- Unique solutions that save time, money and improve overall operations sell well
- Time to market is crucial, late products lose significant market share
- Manufacturers are will to use commercial off the shelf hardware (COTS) to save time to market
- Cost reduction becomes more important as volumes increase
Please let me know what you think