Economic Resilience

Check out the lines at the Apple store for iPhones and you have to wonder what all the economists are worrying about.

It seems incongruous, but the electronics industry is faring well in the face of a global economy that is flat in the best of places, sluggish in others, and faltering everywhere else. So what’s up?

Mobile computing is the answer. While predictions of the computer’s demise are overblown—everyone who’s creating content still needs a keyboard and lots of raw performance—the ability to download all sorts of information on a smart device these days is astounding.

In a speech at MemCon, Jim Elliott, VP of marketing at Samsung, said that 30% of 18 to 34 year olds check Facebook before they get out of bed in the morning, and that for the class of 2014 e-mail is dead. Moreover, according to his stats, the worldwide “dumb” phone conversion is just now happening, and that tablets have now crossed desktops in terms of units shipped.

Just as the PC era blew the doors off corporate dumb terminals—and created a whole cyber security industry in the process—the ability to access e-mail, videos, music and the Internet with a device that fits in your pocket or weighs so little that you don’t notice it is creating a buying frenzy.

Will it replace everything else—thin clients, centralized processing, personal computers? Probably not. Cloud computing requires data centers. People who work on spreadsheets or who write volumes every day get frustrated trying to type on touchscreens for long periods of time. And people who do video editing scoff at the amount of processing power available on portable devices.

Still, the ability to mix and match all of this stuff seamlessly is driving sales of a whole new wave of devices, and there are still billions of people on the planet who are still an untapped market. There is upside in the conversion from basic cell phones to smart phones and from notebooks to ultrabooks and tablets, and there is even more upside in tapping new markets around that globe that have never been connected before.

This is system-level design at its finest, with an ever-expanding view of what characterizes a system. The global communications infrastructure is the ultimate system, and it’s just beginning to become more fully utilized. That explains why electronics and design are faring well at the same time the global economy is floundering. Priorities have changed, and electronics are now dead center in all of this.

—Ed Sperling