Why haven’t a majority of chipmakers not seen any value in connecting with the end consumer and making them aware, that they are really the brains behind their digital lifestyles?
Why only one chipmaker decided otherwise and saw the value of branding? That company chose to invest in it’s name, so that the end consumer could specifically demand it’s branded product to power their personal computers. That company’s brand name is in the same class as Coke, Disney and McDonalds and has helped it to be ranked as number one semiconductor company for the past decades.
We have a dichotomy of a situation. Semiconductor industry for a major part does not invest in branding and when one chipmaker does, the results are an unequivocal success. Critics of semiconductor branding argue that success of Intel with their Intel Inside® is an exception. So what’s the billion-dollar reality? Since the Dotcom bust of ‘2000s’ semiconductor industry has seen rapid commoditization. Another chipmaker like a commodity can replace a chipmaker and the unaware consumer wouldn’t even know.
The motivation behind this book came when after years of semiconductor commoditization; there was a subtle change. System companies like Apple not only acquired specialized chipmakers but also started advertising the technology inside. This change was initiated as user experience became a key differentiator and associating value to what’s inside became strategic. Now to understand if this trend that we have seen since the launch of iPhone, Android phones, iPads is an outlier or if it’s for real and if this trend will hold in the decades to come, I go back in time. I analyze how the relationship of consumers and electronics has evolved over the last century.
Different times since the invention of vacuum tubes have been marked by key historic events that have brought revolutionary changes in the semiconductor industry. These revolutionary changes were brought by social, political, economic, cultural factors and not just the supremacy of one technology over the other. What was striking to me was that historically in each of the era, the consumer awareness of what’s inside was leveraged to gain marketshare! It was only during the DotCom era that I have classified as times during years 1996-2006 that investing in what’s inside branding would not have provided any strategic advantage for reasons discussed in this book. The DotCom era was superseded by an era (2007-present) where user experience became key and thus presents a great opportunity again for what’s inside branding as discussed in the book.
As social and cultural factors play a key role in influencing semiconductor industry, I also analyze how a growing consumer base out of China will influence semiconductor branding. Will a Chinese consumer care what’s inside or will it only care only about low price? How will a growing chip industry out of China affect the overall global dynamics and should that be an additional reason why the global chipmakers ought to invest in a dedicated brand-awareness program and that too specifically in China?
We, in the semiconductor industry are at a key decisive point today. End-consumer values experience, system companies are opening the hood and marketing what’s inside, consumerism is spreading into China and there is a growing semiconductor industry out of Greater China. An understanding of these factors would help global chipmakers take a holistic view of the current dynamics and thus see a value in semiconductor branding that can be leveraged as key strategic advantage.