Earlier this month, COMPUTEX 2014 in Taipei, Taiwan, was proof positive that the dawn of wearable computing and a next level of ubiquity is here. From the trade show floor to keynotes and casual conversations throughout the week, the momentum and commitment to real progress for wearables was clear all along the semiconductor and electronics supply chain. No longer are we seeing only design concepts and stand-alone devices geared to particular use cases; this year the demonstrations and showcased solutions are farther along in market readiness and they are supported by new component designs for embedded ICs designed to handle exactly the small form factors for wearables and mobile, power and heat management issues, as well as ability to handle multitasking and multiple IoT device interfaces. The supply chain is demonstrably moving together toward real IoT and wearable computing solutions from the hardware up and out to M2M connectivity.
Core components focus on IoT
The recent announcements at COMPUTEX by major chip manufacturers, notably ARM and Intel, underscore the level of research & development that is supporting real expansion and adoption for wearables and IoT proliferation. The market diversification by Intel was marked by the launch of their latest mobile processors, the 14nm fanless Broadwell processor, the Core M for 2-in-1 (hybrid) Pcs, and a SoC platform for low-cost mobiles targeting emerging market devices. Similarly, ARM presented various solution series across processors and supported through the ARM mbed™ platform for IoT and wearables that are scalable in terms of device design to meet the full range of product pricing levels and features.
Beyond the processors specifically designed to support new mobile and IoT device growth are the wider supply chain opportunities for other ICs and components as well as the critical growth in data centers and networking. These are the backbone for handling IoT connectivity, which is comprised of data gathering, exchange, analytics, and storage. While wearables currently have been focused on health and fitness and mobile connectivity via smartphones, this is just the start, because IoT covers the entire range of SmartLife activities that we engage in daily including transportation, leisure and work events. Quickly we begin to appreciate that the current IoT ecosystem is as deep as it is wide covering every industry sector and application. Unlike hot markets of the past, such as PCs, smartphones, etc., IoT's reach will drive growth along the entire semiconductor and electronics supply chain.
Growth proliferation driving supply chain
The industry research from most analysts forecasts significant growth for the global wearable market, likely to exceed 7-fold growth by 2020.
Alongside of all of this growth promise comes the question of how will our current supply chain change and how will it stay the same as the IoT ecosystem matures and expands? Certainly there are market opportunities across the board and growth is good, but growth also presents new challenges, particularly as we enter into new levels of integration and more complex components driving the devices and backbone of this new IoT world. This IoT ecosystem is not just in the consumer domain; enterprise and industry solutions are simultaneously being embraced and further increasing the pace of new market opportunities and the level of competition as companies vie for first mover and leadership opportunities. New supply chain connections and new component options and interoperability necessitate careful consideration regarding component sourcing, testing, and inventory management solutions. With the dynamic and broad nature of the IoT growth cycle we are entering, there are many more moving parts to today's global supply chain, particularly for sourcing and inventory management. But none of this change threatens the importance of strong partnerships. During positive disruptions, as with stoppage disruptions, having solid partners with deep expertise and reach into the semiconductor and electronics supply chain safeguards the ability to successfully compete and manage growth rather than getting stuck in navigating rapidly changing partnerships and inventory requirements.
Mark Bollinger is VP, Marketing, for Smith & Associates