This is 4 pages article, i need a 1 or 1 1/2 pages summary
The power of many
The shift from personal to personalized computing
Oct 8th 2011 | from the print edition
ANYONE WANTING TO get a better idea of the scale of the changes taking place in the world of consumer electronics should take a look at Foxconn's giant factory complex in Shenzhen, in southern China. Known as Foxconn City, it covers an entire square mile and is crammed with manufacturing operations and company-managed housing, medical facilities and educational centres. About 400,000 people work there, roughly as many as live in Oakland, California.
Like several other Taiwanese firms that operate factories at home and in China, Foxconn churns out electronic devices on behalf of a number of Western companies. By tapping into cheap Asian labour, Apple, Samsung and other consumer-electronics giants have been able to drive down the prices of their phones and other gadgets, broadening their appeal to consumers. A handful of insurgent Asian firms, including China's Huawei and Taiwan's HTC, which make devices that run on Google's Android mobile operating system, are using their cost advantage to build their own global brands.
A globalised supply chain is not the only thing helping consumer-electronics companies to cut costs. They are also benefiting from economies of scale as the incomes of more and more people in more and more countries rise to the point at which gadgets are affordable. Erik Brynjolfsson of the MIT Sloan School of Management points out that because of this, manufacturers of consumer electronics are now moving down production learning curves faster than more specialised tech firms.
HTC is a case in point. The company shipped over 22m phones in the first half of this year, more than twice as many as in the first half of 2010. As it has grown, it has been constantly tweaking the integration between product development and manufacturing. Matthew Costello, the firm's chief operating officer, says that it now takes six to 12 months for the Taiwanese company to get a product from the conceptual stage to a consumer's hand, compared with 12 to 18 months only two years ago.
Power surge
The ability to amortise spending over a fast-growing audience is also encouraging tech firms to pour more money into consumer-focused research and development (R&D). Asked what is driving consumerisation, Jen-Hsun Huang, the boss of NVIDIA, an American firm that makes graphic chips for everything from gaming consoles to smartphones and supercomputers, whizzes through a quick calculation. There are about 200m PCs sold every year that contain the kind of chips that NVIDIA produces, he says. Assuming an average sales price of $20 per chip, that makes a potential market today of $4 billion for the firm's products. Sales of the types of PC that NVIDIA targets are likely to grow, so this number could increase.
However, Mr Huang expects the market for smartphones to grow far faster, with around 2 billion ultimately being sold each year. Given that the average sales price of NVIDIA's chips for these devices is $20 too, the potential market is $40 billion, ten times as big as that in PCs. Other forecasters also expect demand for smartphones to soar. Gartner, a research firm, estimates that 1 billion will be sold in 2015, up from 468m this year. "R&D is shifting to consumer-focused markets simply because we have more hope that it will be monetised there," explains Mr Huang.
These economic trends are being reinforced by several technological ones. Arguably the most important has been the ability of microchip-makers to squeeze ever more computing power onto their products, as Moore's law (which holds that the number of transistors on a single chip doubles roughly every two years) has continued to operate. James Bruce of ARM, a British company that designs chips for the iPhone and other portable devices, reckons today's versions are 40 times more powerful than those around in 2000.
One of the most important leaps has been the introduction of "multi-core" processors, tiny chips with two or more processors, or "cores", on them. Often, smartphones are used only for simple stuff such as calls and e-mail, which do not require all of their computing potential. By using multi-core chips and smart software, phonemakers can shut down one or more of the processors, reducing the drain on phones' batteries. "We have become experts at the art of doing nothing," jokes Mr Bruce.
Other advances have also contributed to the personal-computing revolution. Lithium-ion polymer batteries, which can be easily moulded to fit different shapes, have made possible ultra-slim devices. Developments in "flash" memory technology have made it possible to store more data in devices. Advances in screen know-how have begotten super-sharp displays. Photos and videos can be shot and shared on the move. Some phones even allow video calls.
Technologically impressive as all this is, the biggest change that the new devices have wrought is to transform many people's experience of computing. The PC may have been personal; a smartphone or tablet, held in your hand rather than perched on your desk, is almost intimate, and you can take it almost anywhere. This shift has been driven by Apple, which likes to boast that most of its revenue now comes from "post-PC" devices such as iPods and iPhones rather than from its Macintosh computers. This is partly marketing talk: crack open an iPhone and you will find many of the paraphernalia-including a motherboard and microchips-that make up the guts of a PC too.
The Gucci of gadgets
Yet Apple has indeed ushered in a new era in which personal technology is finally living up to its name. That is because the technology is starting to adapt to the people who use it rather than forcing them to adapt to it. The most obvious manifestations of this are the touch-screens and intuitive operating systems on many tablets and smartphones that have allowed even toddlers to take to them with gusto. It is also reflected in the way that phones can now be tweaked to reflect people's increasingly connected lives by, say, bringing up a friend's latest Facebook posts when he calls. "The PC is personal but nowhere near as customisable as the smartphone," says Tim Bajarin of Creative Strategies, a consultancy.
The marketing of this new generation of mobile devices has also reinforced the notion of technology as something personal. Again, Apple has led the way, encasing the mass of electronics that make up iPhones and iPads in elegant cases and churning out its iPods in a range of different colours. "Consumer technology is becoming fashion," says Paul Saffo, a veteran Silicon Valley tech-watcher who works for Discern Analytics. "And Apple is now the world's biggest fashion company."
The PC may have been personal; a smartphone or tablet, held in your hand rather than perched on your desk, is almost intimate, and you can take it almost anywhere
Still, no matter how good a gadget looks, utility counts. This is where smartphones excel. Many now contain sensors such as accelerometers (which detect whether a gadget is being held vertically or horizontally), gyroscopes and compasses. More and more employ global positioning system (GPS) technology, which let the Geissbühlers find their iPhone when it returned from its space mission. Soon this sensor technology will become widespread too: ABI Research forecasts that by 2013 85% of smartphones will be shipped with GPS systems and around half will contain accelerometers and gyroscopes.
Thanks to these sensors and the apps that tap data from them, smartphones are being used for all sorts of things, such as navigation and video-recording, that used to require dedicated devices. Some in the industry call the smartphone the Swiss Army knife of consumer electronics. HTC's Mr Costello says it is more like a black hole "because it is swallowing so many other gadgets".
Another big driver of mobile-device usage-and thus of consumerisation-has been the rise of cloud computing. For much of the personal-computing era, the content that people needed for work or entertainment had to be stored on PCs' hard disks, or on external hard drives and USB keys. But now data and content often reside in the "cloud": large server farms, run by Amazon, Google and others, where huge amounts of data are stored for retrieval from almost anywhere in the world.
Pioneers such as Amazon have built cloud-based "ecosystems" that make content such as its electronic books widely available. Even though the firm has its own e-reader, the Kindle, and has hatched a tablet computer too, it has also created apps and other software that let people get at their digital stuff on all sorts of devices, including PCs. Other companies are developing their own ecosystems in a bid to make people's mobile-computing experience even more seamless. Google's recent $12.5 billion acquisition of Motorola Mobility, which makes smartphones, tablets and other gadgets, will enable it to produce a new crop of devices to show off its cloud services, such as Gmail and Google Docs, to best effect. And Apple is stepping up its integration efforts, rolling out an "iCloud" in which people can store up to 5GB of content for nothing, and more if they pay.
Heads in the cloud
The rise of the cloud has also created an explosion of other consumer-focused web services. These include the big social networks such as Facebook, which has over 800m users, and a host of smaller firms such as Foursquare, which was created specifically to let people tell their pals where they are. This combination of social networking, location-signalling and mobile computing-nicknamed "SoLoMo" by John Doerr, a prominent venture capitalist-has given birth to outfits such as Badoo, a site for people wanting to chat, flirt and date. Mobile computing is also encouraging people to use web services more often than they would on a PC. Facebook reports that people who visit its network via mobile devices are twice as active on it as those who tap into it via other means.
Other small software companies are also placing powerful tech tools in people's hands. Dropbox lets users upload photos, documents and other content via a simple interface and then retrieve them from many different devices. SlideShare allows people to share presentations and other stuff via the cloud. Many of these companies offer a free basic service: Dropbox lets users store up to 2GB of data for nothing, then charges for more.
Amazingly capable mobile devices and oodles of cloud-based content are two of the three pillars on which the personalised computing revolution is being built. But it is the third pillar-the proliferation of broadband connections-that has turbocharged it. In many rich countries fixed-line broadband connections are now commonplace, often with a Wi-Fi link at the end of them to allow people to use their devices wherever they are in homes or offices. And a variety of wireless technologies including "third-generation", or 3G, networks, Wi-Fi and Bluetooth have made it possible for people to stay connected to the internet almost everywhere.
Skype, which claims to have about 170m monthly active users, is one of the services that has flourished as all sorts of devices have become more powerful and connected. "It's amazing how many things you can now use Skype on," says Tony Bates, the firm's boss, who points out that many of the innovative uses of the online phone and video-calling service have been inspired by consumers. For instance, when teachers began using Skype to swap advice on classes, the firm added features that made it easier for them to collaborate using its technology.
Like many other technology executives, Mr Bates is convinced that consumerisation is an unstoppable force and that it has raised people's expectations hugely. "It used to be that the best IT experiences people had were in the office," he says. "Now that technology has been democratised, they have become used to doing new and exciting things themselves." For their employers, this is creating both opportunities and headaches.