By Tom Tarnowski, Inclosia Solutions
Electronic devices such as laptop computers, cell phones and Personal Digital Assistants (PDAs) are at risk of becoming commodity products. Size and performance have historically been the primary differentiating factor for electronic equipment, but the marketplace has evolved to the point where technology alone is not enough to stand out in the market. Enclosures, once an afterthought in the design of electronic devices, now play a much larger role in the commercial success of products, offering manufacturers a sustainable advantage against fast following competitors.
Electronics original equipment manufacturers (OEMs) face a market environment in which consumers demand the latest technology, and progressive product designs. At the same time, OEMs are experiencing competitive pressures to reduce costs by cutting internal capital investment and resources.
These conflicting demands are leading many OEMs to use electronics manufacturing service (EMS) providers or even original design manufacturers (ODM) providers to gain economies of scale. As OEMs rely more and more on outsourcing, a situation has evolved where many of the players have similar internal capabilities and share the same suppliers. The devices offered by the OEMs may have common electronic components, operating systems and software as competitive products.
The characteristics that differentiated electronic products in the past size, speed, weight, functionality no longer offer an effective way to maintain a competitive lead. Today's electronics OEMs must seek new ways to set their products apart from the rest.
Enclosures, once an afterthought in the design of electronic devices, are beginning to play a much larger role in the commercial success of products, offering OEMs a sustainable advantage against fast-following competitors. Appearance and new, enclosure-enabled functionality are bringing new life to products — and a new perspective to brand value.
Creating an Emotional Connection with the Consumer
Developing a competitive advantage through desirability (instead of speed, size, etc.) has been accomplished for many years in other consumer-oriented industries ranging from fashion and fashion accessories to furniture, household appliances and even automobiles. For example, wristwatches provide a great example of the potential to use appearance (like jewelry), ruggedness (a scuba diver's watch) or ease of use (a runner's watch) to create emotional bonds with the user. Wristwatch technology long ago reached a point where watches are assumed to be accurate timepieces and the size is limited only by the user's ability to wear and interact with the device and to see the display.
Because watch electronics and mechanics are now commodities, consumers buy watches based on emotional factors such as the appearance and the brand. As a result, there is a staggering variety of watches available on the market, and many consumers have several watches, selected for different types of use — a "dress" watch, a "sporty" watch, a waterproof watch. Wristwatches have also become available through a wide variety of many channels. Even at a relatively small shopping mall, watches are available at clothing stores, jewelry stores, variety stores, at kiosks and in sporting goods outlets.
The Growing Importance of Enclosures
Until recently, the main challenge in developing wireless electronic devices was finding the right balance among size, weight, features, performance, cost and speed to market. Every manufacturer formulated their product by choosing from the same set of characteristics. The development cycle was lengthy by current standards, with typically at least a year between the time development began and products were to arrive in market. If the device arrived on shelf with characteristics that were better than competitive items in the same price range, it was likely to be a commercial success. And it would take the best competitors at least six months to match the functionality in comparable products.
Compared with the speed of advances in integrated circuits, displays, communications and even batteries, enclosure technology has been relatively static. Simply put, OEMs placed relatively little value on enclosure performance or aesthetics, so there was little investment or interest in advancing enclosure technology compared to the electronic components.
Most of the developments in enclosures were tied back to improving on the traditional key characteristics like size, weight and cost of the total device. For example, advances in injection-molding technology allowed the enclosure walls of handhelds to become significantly thinner during the last decade, without reducing resilience or durability of the product. Plastics formulation and processing technology has allowed manufacturers to reduce the wall thickness of injection-molded plastic housings from 1.5mm to 0.8mm or less. Similarly, larger portables like laptop computers are often manufactured with thin thixomolded magnesium housings, resulting in a lighter, yet still durable casing.
More recently, as differentiation in product performance has reduced, aesthetics have come into play. Black and gray mobile phones and laptops have largely given way to a variety of pigmented, painted, plated and printed parts, resulting in the current generation of products, which include metallics, full-color graphics, transparent and translucent appearances. This new wave of choices has played into consumers' desire for products that are more stylish and that communicate the product brand.
From a marketer's standpoint, the enclosure offers a unique opportunity to connect with the consumer. The enclosure or "packaging" surrounding the device is the first thing a prospective purchaser sees and touches. An eye-catching appearance can be communicated in an image — and no words or explanations are needed to describe what sets it apart — it's intuitive and obvious to everyone who sees it. An unusual look can also bring tremendous value in "buzz" or word of mouth it generates among consumers. Although the enclosure typically accounts for only about five to seven percent of device manufacturing cost, it offers a high-value opportunity to create a competitive advantage by influencing the emotional connection between the user and the product.