SAN FRANCISCO -(Dow Jones)- Electronics maker Corsair Inc. has decided to get tough with its competitors.
The company now sells removable flash drives for laptops coated in the same metal used to build jet fighters, and wrapped again in a layer of rubber. The toughened-up device, the company says, is virtually indestructible.
"It's the HumVee of flash drives," said Corsair partner development manager, Vivian Lien.
About two months after the $129 flash drive debuted, it has captured a respectable 1% share of the entire USB flash-drive market.
Electronics that can take a pounding, and still keep processing, were once solely the domain of the "guns and hoses" niche market, that is used by police, fire and military operations. But as Corsair's experience shows, electronics makers now think that what is referred to as ruggedized gear is ready for the mainstream.
Sales of ruggedized devices are expected to grow at an annual rate of 16% to reach $9.2 billion in 2011, from about $4.6 billion this year, according to the market research firm ABI Research. However, the trend also threatens corporate bottom lines because of the added manufacturing costs and the slower replacement cycles. Rugged laptops, for example, last three times as long.
Nonetheless, consumer-electronics makers say they plan to make more rugged products, likely leading to further acceptance of such products, IDC analyst Bob O'Donnell said.
For electronics makers, making things rugged helps their products stand out, especially in markets like USB flash drives, where products have become commoditized. Meanwhile, as electronics become much more central to consumers lives, there is a growing consumer demand for longer lasting gear.
Computer-maker Dell introduced its first ruggedized laptop in January, and computer-makers Lenovo Group and Hewlett-Packard say they plan to toughen up computers popular with consumers, say representatives for those two companies.
Meanwhile, electronics-maker Motorola made a $3.9 billion bet on the market, which is what it paid to buy Symbol Technologies, in a deal that closed in January. Symbol is one of the premier makers of ruggedized devices.
Aside from laptops, ruggedness has perhaps its best shot at the mainstream traction, device makers think, via cellphones, arguably the most abused of all personal technology. One of the best examples of the new crop of consumer-friendly rugged cellphones is Casio's G-zOne cellphone, which Verizon Wireless began selling two months ago in the U.S. for $100 with a two-year service contract.
Aside from G-zOne, which has survived being run over by one product reviewer's truck, there are also now tougher personal digital assistants, cameras, Web cameras and external hard drives.
Expect more to come. For example, Motorola plans to toughen up lines of its phones, as more cellphones end up in the rough-and-tumble hands of teenagers and young children. At the end of 2006, nearly 70% of all U.S. teenagers used a cellphone.
Motorola is also developing tougher cellphones for the mainstream markets in China and India, where phones are more likely to be used outdoors and, as a consequence, need to be much more resistant to dust, sun and water damage.
Accounting For Ruggedness
Despite the rising consumer demand, manufacturers of tougher products have to deal with a longer wait for consumers to buy a new device, then replace it with a next-generation one, or another one of the same devices.
The ever-lengthening replacement cycle threatens cash flow and product-development cycles.
What remains to be seen is whether the price premium for rugged goods - somewhere north of 5% on average - helps make up for reduced sales from consumers not having to replace their goods, or upgrade to new ones, as often. But companies that recognize this threat are prepared to move forward, anyway.
"Planned obsolescence is great for manufacturers," said Kyp Walls, senior product manager for Panasonic's ToughBook line of ruggedized notebooks and laptops. "But it's not good for consumers. While our business might depress a little bit, we see ruggedness finding its way to other Panasonic divisions."
-By Ben Charny, Dow Jones Newswires; 415-765-8230; firstname.lastname@example.org
(END) Dow Jones Newswires "
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