At the Gate: Industries under Siege from Electronics Innova - PowerPoint Presentation

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At the Gate: Industries under Siege from Electronics Innovation

Jonathan Melnick, Ph.D.

Senior Analyst

Jonathan.melnick@luxresearchinc.com

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Agenda

Historic disruption in electronics

New disruption in electronics is cross-industry

Disruption is a two-way street

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Revolutionary products evolved on performance and size, displacing incumbents along the way

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Then devices combined, also creating disruption

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Gartner

2007 PC OS Market Share

Net Applications

2007 cell phone market shareSlide5

A new level of disruption occurred with mobile mass adoption and ubiquitous connectivity

5Slide6

Agenda

Historic disruption in electronics

New disruption in electronics is cross-industry

Disruption is a two-way street

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Electronics becomes the differentiator

Old banking proverb: “If

you owe the bank thousands (a small amount), then the bank owns you. If you owe the bank millions (a large amount), then you own the bank

.”

IT, electronics, and software have outsized importance in many industries

Data security

AnalyticsInfluencing consumer behavior/choiceProcess optimization

Novel functionality

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Healthcare has already seen significant electronics disruption

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HealthcareSlide9

Electronics in healthcare has evolved over decades

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1940’s

1960’s

1950’s

1970’s

1980’s

1990’s

2000’s

2010’s

Devices

Apps

Investors

Individual, stand-alone devices

Application specific systems

Integrated technology suites

Connected HealthSlide10

Google invests throughout the healthcare ecosystem

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Google invests throughout the healthcare ecosystem

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Electronics disruption in automotive is taking hold

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Healthcare

AutomotiveSlide13

Electronics will be half of the value of a car by 2030

What it means to make a car is changing – taking OEMs far beyond core competencies:

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1970 GM

: 4% of cost from

electronics and software

2010 GM

: 30% of cost from

electronics and softwareSlide14

The vehicle is becoming an electronics battlefield, and OEMs are struggling

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"infotainment system problems plagued the industry once again [...]

unresponsive touch screens, reluctance to pair phones

[...]

younger people are more likely to say a system isn’t working“

- Consumer Reports, 2014Slide15

Apple and Google’s first automotive products hit the market this year

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Android Auto

Apple

CarPlaySlide16

Some auto makers have a dismissive attitude about electronics influence in cars

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“We take steel, raw steel, and turn it into car. They have

no idea what they’re getting into if they get into that.” former GM CEO Dan

Akerson

February 2015Slide17

The new automotive supply chain will be blown wide open, and innovation is decoupled, and accelerated

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Tier 1 supplier

Tier 2 supplier

Tiers 3-5

Raw materials

Electronics

Components

Foundries

Raw materials

OEM

(Automaker)

ODM

(Device maker)

New car models every 4-7 years

New car electronics

hardware

every 1 year

New car

software

every 1

monthSlide18

Diamler

is more concerned about Apple’s moves than GM

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“We take steel, raw steel, and turn it into car. They have

no idea what they’re getting into if they get into that.” former GM CEO Dan

Akerson

February 2015

“

What

is important for us is that the brain of the car, the operating system, is not iOS or Android or someone else but it’s our brain,” “We do not plan to become the Foxconn of Apple,”

Diamler CEO Dieter Zetsche September 205 Slide19

Apple and Google have automotive plans well past infotainment

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Android Auto

Google Self-Driving Car

Apple Titan

Apple

CarPlaySlide20

Electronics disruption in food is still early days

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Healthcare

Automotive

FoodSlide21

Innovations in food look to address food quantity and quality

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Electronics technologies are being developed and deployed to start to address food’s challenges

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John Deere’s

FarmSight

requires expertise in displays, sensing, analytics, and connectivity

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Where are the opportunities for electronics disruption in the future of food

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Crop health and nitrogen sensors

Lux Take-

Positive

Printed temperature sensors

Lux Take-

Positive

Engineered meat and leather from cell lines

Lux Take-

Wait and see

Electronic Shelf Labels

Lux Take-

Positive

Sweat-based calorie and hydration

Lux Take-

Wait and see

App/ERP platform for selling food near expiration

Lux Take-

Wait and see

Personalized nutrition assessment via genetic testing

Lux Take-

PositiveSlide25

Agenda

Historic disruption in electronics

New disruption in electronics is cross-industry

Disruption is a two-way street

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It’s coming to your industry, its just a question of when

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Food

Automotive

Healthcare

Improve existing

processes

Critical industry

differentiation

New requirements

and processesSlide27

It’s coming to your industry, its just a question of when

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Food

Automotive

Healthcare

Improve existing

processes

New requirements

and processes

Critical industry

differentiation

Senior housing

2023-$127 billionInfant formula2024- $22.9 billion

LED Luminaires

2023- $25.3 billionSlide28

Under Amour looks to rise to the top of the connected athletics value chain

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Nov. 2013: $150 Million/ 20 million users

Feb. 2015: $475 Million/ 80 million users

Feb. 2015: $85 Million/ 20 million users

UA Record- track fitness, compete with friends

Currently works with “hundreds of devices”

inc.

Jawbone, Pebble, and Misfit

Partnered with HTC to develop

devices for the UA RecordSlide29

Takeaways

Electronics has crossed a tipping point, opportunity lurks in unconventional places

The more you rely on electronics to compete within your industry, the more susceptible you are to disruption

How do you avoid becoming the next Foxconn? Can you build up your electronics capabilities to compete in electronics and IT?

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Thank you

Jon Melnick, Ph.D.

Senior Analyst

jonathan.melnick@luxresearchinc.com

+1 617 502 5324