Call me a hopeless romantic. Three years ago, when I was sitting in the same room at Renesas HQ in Tokyo with Mr. Akao, the then president of Renesas, talking about Renesas' future, I actually did believe that the Japanese company's acquisition of Nokia's modem business was a bold step, which might lead to something.
Do you think it was Renesas' management that blew this whole thing, or it was inevitable because the global smartphone market so drastically shifted?
IMHO, today's markets move faster than good strategies.
Secondly, I see a trend where someone grabs a market with a fresh technology (Google with MapReduce; Apple with iPhone/iPad) and competitors quickly respond by open sourcing a competing technology (eg Hadoop is open source MapReduce and Android-based Galaxy devices are open sourced iPhone/iPads), so there isn't even time for a number three technology to emerge.
In networking, a handful of companies including Nicera (acquired by EMC) were trying to move fast with a version of software-defined networking. Competitors saw this and created Open DayLight, an open source version of the same functionalty.
The dog-eat-dog business climate has morphed into a cut-em-off-at-the-knees environment.
"Do you think it was Renesas' management that blew this whole thing, or it was inevitable because the global smartphone market so drastically shifted?"
Without a doubt, it was RMC management. The Apple/samsung duoploy in the smartphone market is blamed much. I mean, RMC couldnt find sockets in LG/HTC/Nokia/Motorola/huawei etc.... And even in the same market conditions, spreadtrum and mediatek thrived.
>> It's impossible to maintain, without big design wins.
That is the main reason. The problem is not just the number of staff but the fact they have not had a great design win in the market. When that does not happen, market share stalls and revenue drops. That is the problem.
Sure iPhone and Samsung providers are thriving. Tomorrow's market will be dominated by others, and those who provide for those are going to be tomorrow's winners. Renesas just couldn't wait for another brand to gain traction.
"Samsung will be fine for a while to come. Apple, however, won't be."
Somehow, I feel it will be the otherway.. Apple is differentiated by its OS atleast. Samsung will feel the pressure of low cost highend Android smartphones.. coming from Google/Amazon/Chinese vendors and selling at 199-399
If you look at the notebook pc market with Apple/others... thats what it tells atleast.
As an RMC employee, let me point out a few things in this article. Firstly, its not 1100 people from Finland that are laid off, rather its 800. Then there are 200 in UK and 100 in Denmark thus 1100 under the Finnish entity.
Second, RMC concentrated on the mid-tier sector and there are LTE design wins in that region with phones expected to come out next month which bring LTE Cat4 phone prices down to $300-$400. How they will work out now is still unknown. Thats not so bad considering a company like Broadcom has been operating profitably in that sector and the competition is relatively scarce, atleast for LTE.
Third, a workforce of under 2000 is virtually unheard of in this industry, its not at all bloated. I would rather say its bordering on anorexic. The likes of Qualcomm and Intel have around 5000. There is a startup like culture in RMC meaning that everyone is expected to do everything, no matter what. This generated a lot of flexibility in the workforce and I see that as a strength.
I agree that not having a China strategy was bad but the ambitious Japanese plan was to take on Qualcomm in the global market; flawed as it was, here we are now.
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