Convergence unlocks adjacent growth
March 3, 2022
March 3, 2022
In prior blogs on transformation in the High Tech industry, we reviewed the need for flexible and resilient supply chain, As-a-Service (AaS) models, and reinvention of the product portfolio to take advantage of smart, connected platforms. In this blog, we’ll now address the need to exploit industry convergence to expand the boundaries of competition.
Many hardware product categories in the high tech industry are quite mature and the mid-term forecast for annual growth rates is less than 5% in many areas including smartphones, servers, storage and printing. To enable double-digit, long-term growth, trailblazers in the high tech industry must enter into new industries and new parts of the value chain. High tech leaders that can orchestrate a strategic industry convergence will expand their total addressable market to enable longer-term growth.
Global opportunities for convergence are real and significant. In an Accenture survey of High Tech industry executives, 87% agreed that convergence is a growth enabler. High tech companies are also well-positioned to expand industry boundaries as they have a history and culture of innovation that exceeds traditional incumbent players. In addition, they already sell their current products across multiple industries, giving them an easier entry and access that a totally new entrant. High tech players could leverage their existing footholds, customer bases and distribution channels to secure competitive positions in new industries.
Multiple industries are ripe for technology-led disruption that fit well with high tech company skills, including automotive, building infrastructure and healthcare. High tech leaders are investing outside of their core industries to unlock new growth and quickly become respected rivals in adjacent industries.
<<< Start >>>
Autonomous boats, cars, trucks, drones, public transportation, military vehicles*
Edge- and 5G-enabled smart buildings, smart grid, energy/utilities management*
<<< End >>>
<<< Start >>>
AI-powered smart hospitals, fitness wearables, COVID-19 contact tracing & wallet apps*
*Source: Accenture research
<<< End >>>
It’s no secret that one High Tech industry convergence trailblazer is Apple. In recent years, they pushed cloud-based offerings to transform segment boundaries including music services with Apple Music, entertainment services with Apple TV, and payments with ApplePay. While Apple continues to invest R&D into hardware manufacturing as well as software production, the company leverages its ecosystem of individual and corporate Apple developers to offer a myriad of customizable end-user experiences.
<<< Start >>>
<<< End >>>
High tech players have four pathways to unlock value creation in dynamic industry ecosystems:
High tech leaders that target and invest in these new industry convergence opportunities are positioned to thrive with expanded boundaries, profits and valuations.
Copyright © 2022 Accenture. All rights reserved. Accenture and its logo are trademarks of Accenture.
This content is provided for general information purposes and is not intended to be used in place of consultation with Accenture professional advisors. This document may refer to marks owned by, or make reference to, third parties. All such third-party marks are the property of their respective owners. No sponsorship, endorsement or approval of this content by the owners of such marks or references is intended, expressed or implied.