The bursting of various technology and market bubbles has led to massive distribution and personnel cutbacks and the relocation of production facilities. Distributors must produce revised business models in response to the changed conditions. In this interview, Steve Stafford, managing director of EBV-Electrolink South Africa, reviews the current market situation and introduces the company’s three-stage technical strategy.
What is the current situation in the distribution market?
"The reduction of increased stock levels following the bursting of the bubble is largely complete. In some areas we see already rising lead times and prices and Flash Memories are on allocation already."
Which applications will trigger the next boom in demand?
" 'Private Access' is certainly one interesting application. Here, we can see Bluetooth technology at the forefront of home and office automation. In conjunction with National Semiconductor, we are making an impact on the market with Bluetooth product groups. Wireless LAN, however, is in our opinion less attractive to industrial customers, since the large telecommunications companies are establishing the network and the hot spots on their own, and the combination of this and the high unit figures and tight budget means that there is scarcely room for other providers. However, additional applications in the WLAN field may provide an opportunity for distribution customers."
Why do you believe that industrial customers could launch successful products using Bluetooth technology but not with wireless LAN?
"Not all of the available Bluetooth applications represent an interesting field of activity for industrial customers. For many small and medium-sized companies, the costs alone of a proprietary Bluetooth solution exceed the opportunities it represents. With applications of this kind, the customer must run through the full development, including hardware and software. We believe that there are few applications that allow this approach to development. However, the module solution provided by National Semiconductor is the ideal solution for overcoming these obstacles. Customers receive a complete, pre-certified module, including RF baseband. The developer need only select the antenna and adapt the application software to his/her requirements. Modules can therefore reduce development work enormously, and are thus also suitable for applications with unit figures of 'only' a few thousand."
Which other technologies show promising market stimuli?
"FPGA manufacturers are undoubtedly among the winners, and extremely high growth rates are evident here. Development in the demand for 16-bit microcontrollers is also extremely dynamic - as are unit sales for analog products. Power supply units is another exciting product segment. This segment incorporates solutions for supplying power to printed circuit boards, not least intelligent power solutions such as motor drives, for the lower and middle performance range. In recent years, these product groups have demonstrated high growth rates, and this pleasing development is set to continue."
What must you do to benefit from this development?
"It goes without saying that we must combine the leading manufacturers for these product groups, in terms of both market and technology, on our line card. However, this alone is no longer sufficient. We must also be able to take the product to the customer. This means that our employees must have extensive knowledge of the product and extensive experience. We therefore require application engineers and salespeople who sell our products act in a proactive way - and this is precisely what we have achieved with our three-stage strategy."
What are the objectives of your 'three-stage strategy' approach?
"Closer inspection of the technical service provision model reveals gaps, in particular where the customer is testing the limits of his/her capacities by introducing new technology. This may be due to the resources being inadequate or unsuitable for this technology. We have addressed this problem with our three-stage strategy, and can inform the customer via our network about companies that could shoulder the burden of development or partial tasks."
What agreements have you reached with the development service providers you promote?
"As part of a contract that can be terminated at any time, the service provider company must simply undertake to support our line card and to use us as the preferred supplier. The agreement also contains a clause that allows the service provider to use products from other suppliers if we cannot offer an appropriate solution - the FAE checks this at a preliminary stage."
Does this mean that your FAE works with the customer and the order processor?
"If the customer wishes to outsource development in part or in full, the responsible FAE not only provides a contact but is also responsible for the entire project. This means that convenient solutions for all those involved are worked out jointly. However, we have no involvement in the invoicing for the service."
How many partners are in the current network?
"Details are currently provided for a list of 22 service provider companies plus the appropriate contact for our FAEs or the customer. We therefore have one partner per country for the most important product groups. This is very important since local support is crucial to success, just as understanding the culture and languages of a country are important factors. We will continue to expand the network."
What does the second stage of your strategy involve?
"The second stage of our strategy is our specialist team of product experts. These include field application engineers who have thorough knowledge and extensive experience. They would also produce joint suggestions and strategies for solving problems and are available to all FAEs as a source of knowledge. This enables the local FAE to provide optimum on-site support to the customer."
What exactly happens when a customer asks an FAE a technical or specific question?
"If a customer approaches us with such a question during the development stage of their product, the first thing that the field application engineers will do, if they cannot immediately answer the question themselves, is to check the capability of the manufacturer to meet the need. If these resources are not sufficient, the FAEs can refer to a knowledge database that we have expanded and maintained. This database already contains over 2000 entries, and forms the third stage of our strategy. It includes details of problems and their solutions, workarounds and errata, NDA presentations, road maps, and in some cases personal comments. The FAEs can enter their query, which is then automatically forwarded to the appropriate specialist team member, depending on the topic."
Are supply bottlenecks expected in the near future?
"Many manufacturers have now reduced their semiconductor production costs by making staff cutbacks at their factories. New staff will therefore have to be employed and trained before the factories can be returned to 100% capacity. This means that there will be a delay of a few weeks before full output is achieved. In addition, many of the 0,12 and 0,18 µm factories are working at the limits of their capacities. If a strong increase in demand were to arise now, shortages could occur accompanied by the appropriate allocation."
For more information contact Steve Stafford, EBV-Electrolink, 021 421 5350.
| Tel: | +27 11 236 1900 |
| Email: | [email protected] |
| www: | www.ebv.com |
| Articles: | More information and articles about EBV Electrolink |
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