Summary
With the current direction of consumer electronics being towards more portable devices that utilize content in the cloud, is there really a need for fiber optic based USB ports?
Analysis
I love Intel. They are one of my favorite innovative companies. And they are innovative in layers. They innovate new chips. And then they help OEMs innovate the devices that can use the chips. And then they innovate the markets for the devices.
My idea for Intel's motto is: If there isn't a market for our new product, create a market.
Kind of like those infomercials you see on TV. How many times have you watched an infomercial and then said 'Wow, I think I might need that'! You're not even sure why you need it, but it sounds so cool that you want to buy it anyway. I guess that's why the infomercial spokesmen ended up with their own show 'Ad Men'. They convince people they need something and the consumer never questions it until after the purchase. I wonder if there is going to be a 'Blog Men' series?
Anyway, I don't mean to be facetious. I really do love Intel. And they really do innovate new markets for their products.
However, I think the Light Peak fiber optic technology for PCs may need "Ad Men" to justify it. Light Peak will initially connect a PC to a device at 10 gigabits per second. And eventually 100Gbs?
Let's think about this for a second. If I read the statistics correctly concerning a 500 megabyte transfer, I get this:
- USB 2.0 - 39 seconds
- USB 3.0 - 4.4 seconds at 5 gigabits per second
- USB Light Peak - 2.2 second (estimated) at 10 gigabits per second
Yep, sounds amazing. But, who needs it? If the cost to the consumer of Light Peak was the same, or even close, to USB 3.0 then this would be a no brainer issue.
At USB 3.0 speeds, I should be able to transfer a 10GB HD movie in about 90 seconds. But, who needs to do even that? I know, I know. There are some that will want it and do it. But, the average consumer? Will we really need to transfer terabytes of information/media in seconds to our personal devices?
The article talks about syncing "a terabyte-capacity iPod in moments". I'm sorry, but I have a hard time visualizing the day when the average consumer is carrying around 100 HD movies on a terabyte iPod and watching them on a 3 inch screen. (All you hard core technophiles out there, please note I am saying 'average consumer'.)
I don't think there is a market for the average consumer's mobile devices, so let's skip the iPod devices and talk a little about Desktops and Notebooks. Oh, wait, the Netbook is quickly replacing both Desktops and Notebooks. And Netbooks don't have a tremendous amount of storage. And they don't need it because the content will be in the "cloud". Will this trend reverse so that storage requirements and content demands start expanding again for Netbooks? Let's summarize Netbooks:
- Enterprise IT groups don't want company content on the device. Any device. It is hard to control and protect. Netbooks will have less not more.
- Microsoft Office 10 will shift the software footprint and the data to the cloud. Simplifies licensing and allows access from anywhere on any device.
- LTE and other technologies will accelerate the connection and ability to move data to access data on demand. As long as I can sync my email and maybe download a movie before I get on the plane I am covered.
- Consumer devices like TVs present data at rates that the consumer can absorb. Does a TV need to get the whole HD movie in seconds when it will take almost 1.5 hours to watch?
The drivers for the Light Peak market simply don't exist at this time. Consumers are shifting to more portable devices and can absorb content (video and audio) only at very fixed rates and can access it real time in the cloud. Enterprises don't want the data out there at all. Ubiquitous communications and services imply continuous access to content without the need for local storage.
No market implies no need for the devices implies no need for the chip technology.
Like I said, Intel is one of my top innovation companies. I am ready to be surprised when Intel innovates the new consumer market that needs Light Peak.
David Croslin consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
