Flextronics tries to remake itself as a leader in the Internet of Things
Sourced through Scoop.it from: www.bloomberg.com
Flextronics has spent 46 years as a low-margin, behind-the-scenes manufacturer of PCs, routers, and other basic electronics, so the Thriller-type jacket sitting in one of the company’s research labs is a surprise. Bright blue instead of Michael Jackson red, the leather coat is dotted with more than 60 sensors and components, including a camera, a glucose monitor, and a wireless phone charger. Nearby, engineers from startups working with Flextronics tap away at similarly flashy gizmos—a headband designed to track moods, a moisture sensor that warns gardeners when they’re drowning their plants.
The gee-wizardry is part of Flextronics’s effort to remake itself as a leading manufacturer for the so-called Internet of Things, the growing ecosystem of devices, sensors, and industrial equipment that connect to the Web. With its PC and printer businesses maturing and customers such as BlackBerry jumping to cheaper rivals like Foxconn, the company, which recently renamed itself Flex, has seen annual revenue drop about 9 percent since 2011, to $26.1 billion. Its share of the $409 billion electronic manufacturing services industry has fallen from 8 percent to 6.6 percent in that time, according to researcher IDC. Building stuff for startups and non-tech companies is a lot more profitable than trying to satisfy giants such as Apple and Cisco, which have squeezed contract manufacturers’ margins to around 2%. That’s one reason San Jose-based Flex aims to become more indispensable with the IoT business, says Jeannine Sargent, Flex’s president of innovation and new ventures. “We touch everything from the connected home to the connected car to connected medical devices,” she says. “Companies in all kinds of industries need to create intelligent, connected devices, but this is an area they just don’t know about.” – Flex’s 2,500 product designers have created a library of 130 component designs that can help companies cobble together devices more quickly. Some of its engineers have built a tiny sensor that scans your retina, useful for products that need to log in users without keyboards. Another group focuses on bendable circuit boards that will be used in electronic tattoos to track vital signs, or in sneaker-mounted wireless chargers that draw power from a wearer’s movement, says Joan Vrtis, who heads that team. “We are trying to be very much in front of what our customers want,” To help customers make use of its components or create new ones, Sargent has opened 23 R&D labs across the country where they can work with designers and use 3D printers and industrial manufacturing equipment to make prototypes. Flex is developing smart shelves with Intel and crop-monitoring sensors with Farm2050, a food production consortium started with Google Executive Chairman Eric Schmidt.
Flex also offers startups lab space, equipment, and training at its $50 million Milpitas (Calif.) facility in exchange for undisclosed equity stakes. “We liked that they were committed to being an innovator, not just a manufacturer,” says Ian Campbell, a co-founder of NextInput, one of the startups that joined the accelerator program. His company’s chip makes touchscreens more sensitive to different levels of pressure. The workspace puts Campbell’s wares on display for the thousands of larger companies that visit Flex looking for manufacturing help.