2012 cre&i expo

1/F., CMA Building, 64-66 Connaught Road Central, Hong Kong Tel: +(852) 2810 1777 Email: [email protected]

“Customer Service is the Most Valuable Source for Innova7on – a Success Story of Silicon Valley”

A presenta*on at 2012 Hong Kong Interna7onal CRE & Innova7on Expo

Prepared by: Al Kwok

Principal IP Advisor, STARS Founda*on (www.STARSF.org) Founder, China Interna*onal Intellectual Property Services Ltd. Governor & Co-‐founder, Savantas Policy Ins*tute Former VP & CIPO, NetLogic Microsystems (“NETL”)


⇒ End-‐to-‐end Product/Service Lifecycle Analyses ⇒ Complete Value-‐Chain Analyses (focusing on

Mission-‐and-‐*me Cri*cal Links in the Chain) ⇒ (Produc*on) Supply-‐Chain Management (SCM) +

Applica*on-‐Service Demand-‐Chain Management ⇒ CRE Design-‐win Professional Services

Innova*on Leadership ⇒ New Applica7on/Service PlaMorms + (China)

Market Sustainability & Scalability

Customer Rela7onship Excellence <=> Product/Service Focus Innova7on Leadership <=> Value Crea7ons for Customers

“Customer Rela7onship Excellence => Innova7on Leadership”

Outline


The Value Hierarchy (Business Models) Va

lues

/Pro

fit M

argi

ns

Applications (Mkt. & Standards)

System Integration (Archit., …)

Engineering (Design, ODM,..)

Manufacturing (Process, OEM)

Intellectual Property (IP)

Out

sour

cing

Tr

end

Consumer recognition Core competency

Brand Innovation

50%

40%

30%

Presented at Intellectual Property Symposium 2002 in Guangzhou on December 10, 2002


The Value Chain (=> DemandSupply in Alignment)

IC H/W PlaMorm

IC S/W PlaMorm (API, drivers, etc.)

System Applica7on PlaMorm(s)

Generic Reference Design (w/ other chips)

Differen7ated Applica7on Designs

Various Applica7ons/Services

Consumer Markets (End Users)

IC Design houses

System Integrators

Service Providers

For Consumer Electronics Market (Ecosystem)

System Manuf.

Great end-‐to-‐end push-‐pull effect for market scaling thru lifecycles


Raising Values of a Product (IP is the Core)

•  价格 = 给客户的价值 => 价格 = 成本+服务+IP授权+品牌

•  Pre-‐sale services mean design-‐win efforts providing solu*ons to address customers’ problems •  This is the best sources of innova7on

and ideas for the next-‐genera*on products (Product & Tech Roadmaps)

•  Post-‐sale services mean reducing customers’ costs of ownership, extending the useful life*me of the product, genera*ng recurring sales & product improvement ideas

•  Embedded IP licensing means the customers can use the product IP for their own product upli[ing & differen*a*ons -‐ e.g., “Intel Inside”

•  Brand recogni7on means the customers recognize the product and its maker for superb quality, performance, reliability & services

Manufacturing Cost (生产成本)

Pre-‐ & Post-‐Sale Services (售前及售后的服务)

Brand Recogni*on (品牌认知)

Embedded IP Licensing (隐含IP授权)

Incr

easi

ng V

alue

s (提高增值

) Price = Values to Customers

(价格 = 给客户的价值)


Serv

ice

requ

irem

ents

driv

e H

/W p

latfo

rm im

prov

emen

ts

Existing OEM/ODM business model breaks the IT Business Food Chain without positive feedback from Service to drive next product dev. cycle

IT Business Food-‐chain

  Hierarchy of IT Business (from “service to consumers” as the top of the food-chain with highest Gross Margin then down):

Service (to consumers) <=> Domestic market (localization) (China market is huge enough) Application (for service) <=> Domestic market (localization) (China centric standards & IPs) Network platform <=> Domestic stds. for local services/appl. International stds. (for global interface)

System Integration <=> Domestic market (localization) vs. Int’l. mkt. (for applications) (China centric standards & IPs vs. Int’l. ones)

S/W & F/W platform <=> Int’l and domestic stds. (global & local) H/W platform <=> International stds. (global IC supplies)


High-‐end vs. Low-‐end Example

  China e-‐book as a low-‐end example   “Shanzhai” business model (山寨型商业模式)   Copy others’ design concepts

  Add more common (proven) applica*ons   Aim for low-‐cost and low-‐price (~US$250)   Lidle post-‐sale on-‐going services

  Lidle connec*on to on-‐going e-‐commerce service   Lidle customer feedback, no learning and no product innova*on

  Apple’s iPad as a high-‐end example   Designed as an e-‐commerce CRM tool (*ed to iTunes e-‐commerce

plaeorm) -‐ one-‐stop e-‐commerce business ecosystem   More recurring business from post-‐sale of iPad (hardware)

  Aim for high-‐value and affordable price (~US$600)   Complete the “H/W plaMorm to Service” end-‐to-‐end cycle for

next-‐genera7on product innova7on


Mature (must have)

Und

er-‐develop

ed

Ecosystem

Well-‐d

evelop

ed

Cut-‐throat Compe77on (me too!)

Applica7on Futuris*c (nice to have)

Too Far-‐out: Not ready,

hype, bubble

Future Growth: Longest-‐term

Future Growth: Long-‐term

Future Growth: Short-‐term

Well-‐developed infrastructure: consumer market by nature with lower (30-‐>50%) profit margins

Building infrastructure &

ecosystem: Indu

stria

l market b

y nature with

highe

r (50-‐>70%)

profi

t margins

Market Posi7oning -‐ Product Focus


Types & Ranking of Innova7on

In the order of las*ng value impact to society (from most to least):   New business model (global produc*vity jump) -‐ great las*ng value impact

  E.g.: e-‐Commerce (internet), pure-‐play foundry business model, carbon trading…

  New business process (global produc*vity jump) -‐ great las*ng value impact   E.g.: Window/Office (new work environment), outsourcing, TQM, ERP…

  New applica*on/market (for exist. prod. or tech.) -‐ great value impact   E.g.: GPS, RFID, radar guiding… -‐ from military to commercial applica*ons

  New technology (for exis*ng product) -‐ great value impact some*mes   E.g.: High-‐speed CMOS (over NMOS) for power reduc*on and device scaling

  New product/service (for exis*ng market) -‐ medium value impact   E.g.: On-‐line shopping/trading, SMS (China), digital broadcast…

  New combina*on of package of technologies, products and services   E.g.: Apple’s iPhone and iPod, Blackberry, solar, clean tech…

  New design (implementa*on or appearance) -‐ limited value impact   New system architectures: e.g., the Sandisk “338” patent for flash-‐memory card   New subsystem/circuitry


Success Example: GPS-‐based Services (MyCard Ltd.)

MyCard Confidential 9August 1, 2008

GPS/GPRS Logistics Service Platform - System Architecture

GPRS

Logistics & PassengerLogistics & Passenger

Logistics Co.

ForwardingAgents

SecurityMonitoring &

Alerts

Customer-specified Call

Services

Functions of Control/Call/Data Centers & Service Platform

Customs

InsuranceCo./ Bank -Asset Mgt.

Real-timeLocationTracking

Coordination,Security Checks

& Alerts

Data analyses / Bus.Intel., Map Database &

User Web Portal

CallCall

CenterCenterControlControl

CenterCenterData Center /Data Center /

Access PlatformAccess Platform

Data Storage &Archives

Map Database Mgmt.

User Access Control &Portal Management

GUI & Templates

EmergencyAlerts

Senders &Receivers


Maximizing IP Value Crea7on – Part 1   Innova*on <= Differen*a*ng values to customers

  Highest values = Mission-‐and-‐*me cri*cal (“Must-‐have”) ones   Customers must use and buy the product when available

  Lidle values <= “me-‐too” innova*on w/o differen*a*on   Intellectual property (IP)

  Protected, reproducible and scalable innova*on   Patent is the best form of protected IP

  Exclusive rights for 20 years to use for commercial purposes

  Values of the patent is based on its “CLAIMS”   The 1st CLAIM is most important in a patent   Scope – the broader and the more independent, the beder

  The fewer enabling elements and less restric*ons, the beder   Coverage – covering all means of customer value crea*ons

  Mapping value crea7ons vs. enabling elements   Values to customers: performance (func*onality & speed), price (yield

improvement & cost reduc*ons), quality (robustness, consistency, tolerance & reliability) & delivery (shortened cycle-‐*me and lead-‐*me).


Maximizing IP Value Crea7on – Part 2   Customer value driven corporate culture:

  Innova*on is pursued solely to create DIFFERENTIATING VALUES to the customers (sharpshoo7ng & no shotgun approach)   Contribu*ng directly to their bodom-‐line in term of cri7cal func7onality,

cost, performance, low-‐power, quality and delivery

  CRE => Strategic partnership and close working rela*onship with the lead customer is a must   All valuable innova*on ideas come from lead (strategic) customers

  Cisco for NetLogic Microsystems (recently ranked as the best supplier by Cisco)

  Aligning all the company’s ac*vi*es to be proac*vely responsive to the customers’ current and future needs   Including applica*on/technology and service/product roadmaps as well as

employee evalua*on/promo*on   Con*nuous innova*ons by solving proac*vely the customers' next biggest

problems (the next product development cycle)


Methodology for “CRE + Con7nuing Innova7on”

Lead Customers’ Requirements => 2nd G => 3rd G =>…

Differen*a*ng Value Crea*ons => 2nd G => 3rd G =>…

Business Model => 2nd G => 3rd G =>…

Service/Product Roadmap => 2nd G => 3rd G =>…

Applica*on/Technology Roadmap => 2nd G => 3rd G =>…

IP Poreolio Development => 2nd G => 3rd G =>… The next innova*on ideas come from customers & “Stress Tests” iden*fying (1)  The weak-‐links in product design & performance and scalability (2)  System (architecture) integrity and scalability (elas*city) issues (3)  The bodlenecks for scalability (technology and manufacturability roadmap)

Close collaboration between the customer and the vendor

1/F., CMA Building, 64-66 Connaught Road Central, Hong Kong Tel: +(852) 2810 1777 Email: [email protected] July 20, 2010 CIIPS Presentation 14

AK comment: Considering the facts that NM is much less than 1/10 of the size (in revenue) of the other 9 top-‐ranking companies and much younger (~10 years old), it is a crowning achievement! Likewise, “ipIQ” rated NM’s poreolio the best for a medium size (~$100M) high-‐tech company worldwide in its “Patent Scorecard 2006” report with the 2nd highest CII (current impact index). Mkt Cap: US$250M @ 2004 IPO => US$3.7B @ 2011 M&A (14.8X in 7 years = >46% CAGR)

(All mul*-‐billion $ companies)

AK comment: Based on a poreolio of ONLY ~100 patents


Conclusion   Knowledge Economy must be Prof. Service/Applica7on driven

  Core competency in professional services is the key to global compe77veness   IBM’s transforma*on is a good example (from H/W to Professional Services)

  Must focus on “True Demand” – Mission/Time Cri7cal ones   Supply-‐side economics (Reaganomics) is a dead-‐end – unsustainable   Real economic growth must come from “True Demand” – not unsustainable

Cheap-‐Credit Inflated False Demand causing con*nual global economic crises   OEM/ODM, SCM… are for the “Push Effect”. From the Demand Side, Services

and Applica*ons based on standardized services provide the “Pull Effect” – the horse (engine providing the Pull Effect) should be in front of the cart (economy)!

  CRE “Professional Services” is the Intrinsic Source of Innova7on & IP   Valuable IP development is from Pre-‐ and Post-‐Sale Professional Services   Core competency development requires “Technical, Business and IP/Legal

Domain Exper*se” – HK’s educa*on & prof. development systems have to adapt

  Hong Kong & the whole world need China for market scalability   GD-‐HK-‐Macau CEPA PlaMorm must be further strengthened with CEPA Special-‐

Policy Pilot (Landing) Site (for product/service localiza*on) – STARSF’s goal!


Thank You! 多谢光临指导!

[email protected]

2012 cre&i expo

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