Internet of Things – Semiconductors and Open Innovation

Leading semiconductor companies are utilizing multiple tactics associated with Open Innovation (OI) to dominate the mobile ecosystem. By moving the focus on growth beyond the confines of their traditional markets, companies such as Intel, Broadcom, Qualcomm, and Samsung are successfully implementing platform leadership strategies that incorporate key elements of the OI playbook – combinations of the outside-in, inside-out, and a coupled OI strategy.

The common use of the five tactics becomes apparent in each instance where semiconductor mobile growth through Open Innovation is targeted. These tactics include in-licensing technology through partnerships and acquisitions; enabling third-party development and complements by developing innovation networks and ecosystems; sharing product architecture control through open source development; enabling information transparency via open platform technologies; out-licensing internal technology via venture capital mechanisms. With these elements being brought together and deployed as part of a systematic OI process, these companies are improving its growth capabilities and are actually building a sustainable OI model.

Intel’s strategy is to grow its leading position at the core of an ecosystem that incorporates multimedia and voice technology companies, IVI system manufacturers, mobile software developers, and car manufacturers.

Broadcom is another company beginning to make headway in automotive, this time, focused on connectivity solutions as part of the company’s plan to expand its embedded wireless technology portfolio.

Innovation tactics are once again focused on partnering and community-building with the likes of Hyundai Motors working with Broadcom and Intel to develop advanced driver-assist, telematics, and infotainment systems.

The impact of Smart Home technology adoption is picking up speed, and semiconductor companies are well placed to capitalize. Companies already making inroads in this market include Samsung, which introduced SmartThings platform, a digital content sharing platform for smart home use.

For many of the leading semiconductor companies making a play in mobile, tactics for exploiting growth opportunities vary, unsurprisingly, according to the specific industry, product technology, and market offering. Specifically, OI plays a key role in achieving breakthrough innovation in each company analyzed. This enables democratized pathways to growth to emerge, allowing them to look beyond the four walls of the organization to secure new knowledge and new partners for collaboration. In doing so, each of the company’s boundaries become permeable, and the process for developing innovation becomes increasingly distributed and dispersed across geographies.

OI has allowed many companies from an increasingly wide variety of industries the chance to explore the advantages of cooperation and collaboration and kick-start their previously stagnant innovation process. Even more significant are the risks associated with not having some semblance of an OI strategy active, with some research indicating that firms that do not enter into collaborative knowledge sharing can, as a consequence, expect to shrink their knowledge base over the long term, lose their ability to partner with other organizations, and ultimately stymie their innovation capability. All of which is bad news for those seeking growth in new mobile markets.

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