When attending conferences, I normally avoid keynote speeches, any panel that involves analysts, and briefings with CEOs. That's because the heavily-scripted materials at such events usually contain so little new information that, according to Shannon's Law, they can be classified as noise. That's why I was pleasantly surprised when Freescale CEO Michel Mayer offered some very useful insights on the future of our industry when he addressed a gathering of the tech media at their annual Technology Forum in Orlando. While the analysis he presented was intended to provide guidance for the traditional electronics industry, it provides some valuable insights and a very hopeful message for those of us interested in green-tech and other socially-responsible applications of technology.
One of Mayer's basic premises is that the consolidation we're seeing in the semiconductor industry is mostly a function of a maturing market which cannot sustain the explosive growth it's enjoyed over the last two or three decades. Explaining it in simple terms, he said that we'd come pretty close to hitting the limit of what people are willing (or able) to pay for communications, entertainment, and most of the other electronics-intensive products and services that eat a large portion of the electronics industry's output. With growth rates eventually falling to roughly match GDP growth while the cost of product development continues to swell, only the toughest, most efficient players can survive to fill the smaller number of niches available in the market ecosystem.
Besides working hard to position his company to cope with near-flat markets, the other half of Mayer's strategy is to direct Freescale focus on sectors which will continue to enjoy above-average growth. Among the sectors he cited as having lots of potential is the so-called green energy market, the stuff I've been writing about in greenTECHZONE and greenPOWERZONE for the past five years.
Mayer's insights were borne out in the forum's technology showcase, where energy-related developments were a large part of the products and demos on the crowded exposition floor. In fact, it was hard to stroll past more than a few booths without running into someone demo-ing advanced automotive controls for ultra-efficient gasoline and hybrid cars, Zigbee-based energy management systems, or DSP-based electric motor controls that squeeze more work out of every watt. Mr. Mayer has, of course, positioned Freescale to address other high-growth markets such as medical and military products, but it was clear that part of the company future rests on the opportunities that will arise as we build a cleaner, more efficient future around an economy based on sustainable technologies.
I'd like to take Mr. Mayer's idea one step further and suggest that one of the other high-growth markets for the next decade or two will be fulfilling the basic needs of citizens in developing nations. There is a huge, unmet demand for many essential products in many parts of Africa, Asia, and Latin America where anyone able to supply affordable communication, Internet access, and even high-efficiency lighting equipment will have a foothold in a nearly-limitless market. Some companies like VIA Computer have already begun to address this market with sub-$200 computers that deliver computing, Internet and IP telephony services while consuming a fraction of the energy required by their Western counterparts. We're also seeing the beginnings of a market for low-cost wind, solar, and biomass energy systems that can bring power to remote areas to help create local industries that strengthen the national economy. Besides the obvious profits, investments in so-called basic-tech for developing economies can also yield dividends in more jobs, more opportunities and less of the poverty that leads to so much of the world's strife.
While I've repeatedly said that there are tremendous opportunities in providing the tools for a sustainable economy, it took a hard-nosed, market savvy CEO to illuminate the market forces that will reward the folks who are smart enough to build them.
Comments? Questions? Ideas for the Next Big Green Thing? Write me at lhg at en-genius.net.
