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Layers of Innovation

First Layer: Business Model. The innovation of business model is usually disruptive, smashing an old ecosystem and constructing a new one. Apple plays such a role by injecting the concept of mobile Internet and Smartphone to the old ecosystem of feature phone. Moreover, the innovation of business model is most difficult to happen. That is why Steve Jobs is so great. Regarding handset and Tablet domain, it is nearly impossible to see one more innovation at such a layer in next ten years.

Second Layer: Technology. Take handset as an example. The performances of chipset and OS are going up quickly. Qualcomm will launch "Krait" with four cores and 2.5G HZ for each core, about the same performance as Intel Core Dou with 2G HZ has. The latest version of Android has integrated WiFi Access, NFC, optimization of power management,video chat, SNS. The development of hardware and software platform has been the mainstream innovation currently. Therefore, we could find players in this layer, such as Google, Microsoft, ARM, Qualcomm, Nvidia, are absorbing more attention in the industry.However,the innovation in technology will not last forever, possibly slowing down within the next three years.

Third Layer: Marketing, Supply Chain, Distribution Channel. Take handset as an example. Once the innovation of the second layer slows down and hence makes the entry level low enough, a large number of Chinese handset companies will actively participate in the design, manufacturing, marketing, or even integration of industry chain. By then, let's say 2012 or 2013 as starting year, the volume of smartphone EMS, ODM,OEM will soars rapidly as we ever saw from Shanzhai phenomenon.