How innovation drives research and development An ARM case study
Page 2: New product development (NPD)
New products may stem from invention or innovations. Invention is the formulation of new ideas for products or processes. Innovation is the practical application of new inventions into marketable products or services.
Product development may follow different routes:
A product-orientated approach is where a company develops a new product. It then seeks a market and ‘pushes’ the product out to that market. This might be to solve a problem or to take advantage of an opportunity. An example could be developing new functions for mobile phones. This is a higher risk approach as the company will carry the costs of development without knowing what the returns might be.
A market-orientated approach develops a product to meet a known current or future customer need. This need would have been identified through market research. Developing a product to specific requirements may reduce costs and increase the probability of product success. Having a market waiting to buy the product gives assurance of return on the investment.
Responding to competitor products allows a business to catch up or overtake business rivals. This development may lead to a better product.
Changes in technology may lead to the development of a more effective product or one which sets a new benchmark for the market. For example, the Amazon Kindle is changing the way people read books.
ARM adopts a route of innovation to transfer its technology into products customers want and need. Its technology supports three key types of chips:
ARM’s product development also takes various external factors into account, for example, the need to develop low carbon products, increase energy security and address impacts on global warming. In addition, meeting global economic challenges is also high on ARM’s agenda. For example, developing countries such as Brazil and China are becoming more affluent and buying more consumer electronics.
Other factors affecting ARM include the customer’s desire for greater computing mobility, lower power consumption and increased battery life. Consumers are also looking to ‘cloud’ technology, for example, in mobile phone apps, to provide remote access to virtual storage and software. This provides convenience and lower cost.
ARM’s main technical driver is power efficiency, making microchips smaller whilst increasing their performance. The smallest processors are now the size of human hair or crumbs.
ARM | How innovation drives research and development