The recent news about the acquisition of the microprocessor design firm, ARM, made me think about the invisible risk for product development.
In previous articles I had written about strategies for a successful product development, as well as what is the focus of the product manager.
Before we continue, lets address the elephant in the room.
ARM is a huge asset
ARM as a company has almost unlimited potential. Many mobile devices use their technology to power the heart of billion devices—their CPU.
Another important factor to take into an account is the future. Both Apple and Microsoft have a plan to introduce or had introduced ARM powered devices and tablets. And we all know that Apple has the largest market cap in the history of the stock exchange.
This means that the technology and its current neutrality are important globally.
ARM does not manufacture its own chips, what it does instead is the creation of reference designs. Those CPU designs are used by different manufacturer companies to produce their own products. This business model reduces the potential conflict of interests.
Think about Google.
Google is the custodian of the Android operation system. Everything was fine until they bought Motorola division and the HTC division. After that, Google introduced the Pixel brand. Now the company is competing with other mobile phone makers. At the moment, the Google market penetration in the mobile market is really low, that’s why no one from their competitors is raising any red flags. Here we have to acknowledge Huawei which are not allowed to use USA technologies, and they are now faced with the challenge to build their own operation system. According to statistics from statscounter.com, their current marker share is around 2,36%.
The risk for the product development when NVIDIA complete the acquisition
NVIDIA is a producer of graphic card chips and had manufactured a tablet in the past, the so-called NVIDIA Shield. This means a hardware chip manufacturer with a dominant market presence has now a key technology which both Apple and Microsoft will rely on.
This position NVIDIA to a key place in the future, at the same time many product development divisions have to ask themselves what does this mean for their products. If they continue to use this technology, will they still have a competitive advantage?
What If NVIDIA decides to manufacture mobile CPUs? How will Exynos and Qualcomm be positioned?
Was there a similar risk for the product development in the past?
We can learn from the past and use it to predict the future.
I can name another big acquisition that affected the industry for good or bad. The acquisition of SUN Microsystems by Oracle. If you don’t know, SUN owned the technology Java and actively developed it. Java is a platform for independent programming language, which powers many modern enterprise software solutions.
At the time of the purchase, SUN developed the technology and distributed it free of charge. After Oracle took control, one of the first thing they did was to sue Google for copyright and patent infringement.
Product Management and Plan B
When we develop product and key technologies are not under our control, we should always have a Plan B. Yes, this could cost us time and money to develop, but what we learn from the past is that once a big player with key technologies is purchased, there is a good reason for that.
We might not know what the future of the ARM vendors will be, but one thing is sure. The future of the product development hardware will become more dynamic and hopefully we will see bigger competition of ideas and innovation.
What is your opinion about the purchase of ARM?
Please share it in the comments below!