Budgets for R & D or what is influenced by research in microelectronics
Engadget stirred everyone up by publishing an article about the race for device prices, when Amazon and Google are constantly reducing the cost of their devices or forcing partners to do so. And according to the author of the article, this leads to sad consequences when innovations become impossible. Translation of this material is on Habré here .
Unfortunately, this material describes the situation from the point of view of the consumer and partially, the manufacturer of the device. But it does not take into account those companies that just create technology. Let's take a look at the table which shows the top 20 companies in terms of research and development costs in 2011.
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When I shared this table in Twi, the most frequent question was this - where is Apple on the list? And this company is not here, because its development costs are significantly lower than all competitors. And it seems to me that there is something to speculate with you.
Please note that the list includes many pharmaceutical companies or those who finance research in the field of health, biotechnology, and drugs. The costs of these companies are concentrated in the field of research in the classical sense of the word (laboratories, the study of drugs, animal testing and clinical trials). All pharmaceutical companies from the list can afford such costs for one reason - they are full-cycle manufacturers. That is, by financing hundreds and thousands of developments, they get a much smaller number of products. But these products have a huge margin and ultimately the company earns. Good earning.
Historically, there has been a specialization in the IT industry - there are practically no vertical companies that produce both components and products for the final consumer. Unlike the pharmaceutical market, where this is commonplace.
How much does it cost to develop a new technology, for example, a new type of memory chips or displays? The banal answer is expensive. As an example, I will cite the data of Samsung Semiconductor - it is expected that sales in 2013 will amount to $ 13 billion, and profits will be $ 2.2 billion. For comparison, in the third quarter of 2012 only on phones, the company earned $ 3.6 billion in profits (for one quarter it surpassed the income of a whole subdivision of components).
Such companies as Intel spend billions of dollars on the creation of new technologies, processors, but the main profit comes from those who create devices for consumers. The cost of the components and the margin on them is significantly less than the margin of the device manufacturer. And at Amazon / Google, they are trying to reduce margins for manufacturers, cram them into the same framework as manufacturers of components that spend billions on development and sell them cheap. That is, companies voluntarily or unwittingly try to change the rules of the game. It is not so important whether they succeed or not.
Much more important is that in the market of IT-manufacturers there is an increase in the trend towards vertical integration, when a manufacturer wants to differ from other companies not only at the device level, but wants to protect itself by creating a set of key components and investing in development. When most of the devices became the same due to the use of similar solutions, the only possibility besides marketing, software for differences from others, is the creation of its own unique components. Apple has taken this path and is trying to create its own processors. I would not be surprised if the company begins to actively invest in the creation of other key components, as was the case with the production of screens for tablets.
Such companies as Huawei, Samsung are already building a vertical model - for them the components are important, but it is even more important that the development costs pay off by not selling these components (the profitability of this business is small). They pay off due to the fact that companies use their own components in custom products and then get the maximum profit out of all possible. The direction of market development today is exactly that.
And in this aspect, in the long run, those who have their own production of components benefit (since these companies may have lower margins, lower prices for final devices - they will still be in the black). For those who have not bothered with this, on the contrary, it means scorched earth - products will be less and less in demand (they will not be as cool as Apple, or as cheap as Google / Amazon). Hitting between two fires, such companies will simply be forced to suffer losses. What we are seeing in the modern market. But this is only the beginning of this process. In 2013-2014, he will prove himself fully. Therefore, I would not complain about the lack of technology in consumer devices - they are created by other companies and are relatively cheap today. And the price reduction is quite a natural process.
Unfortunately, this material describes the situation from the point of view of the consumer and partially, the manufacturer of the device. But it does not take into account those companies that just create technology. Let's take a look at the table which shows the top 20 companies in terms of research and development costs in 2011.
')
When I shared this table in Twi, the most frequent question was this - where is Apple on the list? And this company is not here, because its development costs are significantly lower than all competitors. And it seems to me that there is something to speculate with you.
Please note that the list includes many pharmaceutical companies or those who finance research in the field of health, biotechnology, and drugs. The costs of these companies are concentrated in the field of research in the classical sense of the word (laboratories, the study of drugs, animal testing and clinical trials). All pharmaceutical companies from the list can afford such costs for one reason - they are full-cycle manufacturers. That is, by financing hundreds and thousands of developments, they get a much smaller number of products. But these products have a huge margin and ultimately the company earns. Good earning.
Historically, there has been a specialization in the IT industry - there are practically no vertical companies that produce both components and products for the final consumer. Unlike the pharmaceutical market, where this is commonplace.
How much does it cost to develop a new technology, for example, a new type of memory chips or displays? The banal answer is expensive. As an example, I will cite the data of Samsung Semiconductor - it is expected that sales in 2013 will amount to $ 13 billion, and profits will be $ 2.2 billion. For comparison, in the third quarter of 2012 only on phones, the company earned $ 3.6 billion in profits (for one quarter it surpassed the income of a whole subdivision of components).
Such companies as Intel spend billions of dollars on the creation of new technologies, processors, but the main profit comes from those who create devices for consumers. The cost of the components and the margin on them is significantly less than the margin of the device manufacturer. And at Amazon / Google, they are trying to reduce margins for manufacturers, cram them into the same framework as manufacturers of components that spend billions on development and sell them cheap. That is, companies voluntarily or unwittingly try to change the rules of the game. It is not so important whether they succeed or not.
Much more important is that in the market of IT-manufacturers there is an increase in the trend towards vertical integration, when a manufacturer wants to differ from other companies not only at the device level, but wants to protect itself by creating a set of key components and investing in development. When most of the devices became the same due to the use of similar solutions, the only possibility besides marketing, software for differences from others, is the creation of its own unique components. Apple has taken this path and is trying to create its own processors. I would not be surprised if the company begins to actively invest in the creation of other key components, as was the case with the production of screens for tablets.
Such companies as Huawei, Samsung are already building a vertical model - for them the components are important, but it is even more important that the development costs pay off by not selling these components (the profitability of this business is small). They pay off due to the fact that companies use their own components in custom products and then get the maximum profit out of all possible. The direction of market development today is exactly that.
And in this aspect, in the long run, those who have their own production of components benefit (since these companies may have lower margins, lower prices for final devices - they will still be in the black). For those who have not bothered with this, on the contrary, it means scorched earth - products will be less and less in demand (they will not be as cool as Apple, or as cheap as Google / Amazon). Hitting between two fires, such companies will simply be forced to suffer losses. What we are seeing in the modern market. But this is only the beginning of this process. In 2013-2014, he will prove himself fully. Therefore, I would not complain about the lack of technology in consumer devices - they are created by other companies and are relatively cheap today. And the price reduction is quite a natural process.
Source: https://habr.com/ru/post/157715/
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