To Qi or not to Qi? The business case for Wireless Power
24 May 2017
After investigation and consideration, I thought it worth sharing a few thoughts on the business case for wireless power, using a power tool application as an example in the thought process;
Wireless power isn’t new. It’s been around in its various forms (inductive, magnetic resonant etc) for a considerable time and has built up assorted standards to support. This includes WPC (Qi), AirFuel Alliance and other emerging solutions. The cordless benefits of wireless power for portable equipment appear clear on the surface and the limitations (max power transfer, coupling orientation and efficiency, foreign object charging etc) are well understood, many of which have been addressed in some way with the competing specifications. It should therefore be simple to put together a basic business case for any application .. but this is where things appear to get more difficult!
This brief article attempts to clarify a couple of the fundamental issues that appear to impede market adoption and cloud the business model;
1. The need for 3rd party infrastructure to deliver Consumer Value
OK, this is the big one! If an application requires a 3rd party infrastructure to deliver the end user (consumer) value, then it’s going to be fundamentally harder to implement as there are more stakeholders that each have their own business concerns and needs that inevitably results in a more complex business case. We only need to look into history with multi-application smart cards, multi-store loyalty cards etc to recognise the challenges!
Despite this, innovative mobile phone manufacturers took the lead to deliver wireless power (Qi) enabled phones, but having a charging pad in the home doesn’t really constitute a ubiquitous charging infrastructure, so the consumer value proposition was limited. In a bid to expand beyond the home, the various competing consortiums appear to have tried to establish a charging infrastructure in 2 key areas;
- A mobile charging solution (in-car). This appears to be gaining momentum as numerous vehicle manufacturers now offer optional wireless charging accessories. However, this isn’t a public infrastructure per-se, although we appreciate some people do share journeys! As a result, the consumer value proposition hasn’t greatly changed.
- A public charging infrastructure (fast-food and coffee shops in the High St, Airports etc). In recent IHS surveys, public opinion appears positive and there has been a great deal of focus by the consortiums on the various trials, but has this really worked? There are a few UK stores with the technology, notably Starbucks and McDonalds with a few AirFuel Alliance (PowerMat) charging stations, but why have we not seen any mass deployments? The only conclusion that can be drawn is that the retailer business case must be limited where the install cost would appear to outweigh the return in many areas.
So, how can the various consortiums and alliances solve this conundrum? The answer would appear to be to focus on applications that don’t require a 3rd party infrastructure to deliver consumer value. This will then build broader consumer awareness of the technology until such times that a ‘’tipping point’’ is reached, consumer buying habits are influenced and the business case becomes more compelling for the providers of a public infrastructure. This appears to be the direction that the WPC is now taking with a focus on Power Tools and White Goods where the consumer is also responsible for the charging infrastructure.
2. The Consumer Use Case
Fortunately, there are MANY markets where the OEM’s control the complete solution; charging pad and end equipment. The business case should be simple then …. but then where are these solutions? After some thought, the next impediment appears to be the consumer use-case. A very forward thinking power tool manufacturer launched their own proprietary wireless charging solution for professional power tools , but has this been successful? We have to consider if there is really a use case for a professional tradesperson to put their power tool on a charging pad and take 30-40minutes to charge a 90W battery from empty when they can simply swap the battery?
The use-case needs to be clearly understood and validated, as if this is flawed and the actual usage is more of an evolution rather than a revolution, then the corresponding business case will change. For instance, if the power tool could be placed on a charging pad between use to ‘sip’ top-up power, then the use-case is more of an evolution rather than a revolution and the consumer value is diminished. As a consequence, emphasis is then placed on the solution cost, rather than the use case and associated value proposition.
3. The Solution Cost
From a manufacturing perspective, costs are reasonably expected to reduce with volumes , so in our experience there are 2 ways this that cost reduction is often approached;
- Increase volumes:
OK, if the volumes from an OEM are limited, then the answer appears to be to implement a standard so that ALL manufacturers can develop compliant solutions to increase aggregated demand. For instance, the same power tool company referenced above has now aligned with the WPC and are leading the 60-200W task force for power tools. Ironically, this then leads back to item 1, so this may not move so quickly!
- Reduce Direct Cost:
An OEMs purchasing department goes to their ODM or component suppliers and says “We’re sorry, the volumes are less than we thought, but we still need a better price …”! I'm sure we’ve all heard that before, but the surprising thing (that many may not be so familiar with) is that it IS often possible to look at things in a different way to cost down a solution;
The first question is always; “Can we modify the original specification and reduce costs through redesign”? This invariably means challenging some of the original specification items especially regarding standards, as if a wireless charging solution does not require interoperability, then is there really a need for an open standard? Can a proprietary solution also addresses the specification and the underlying elements that led to a standard definition?
The second question is “Can we adopt a different business model to share some of the risk and create a longer term business case that works for all?” This is also often possible and is the nature of a true ODM partner relationship.
In summary, there are MANY possible markets for wireless power, although most have challenges in the Consumer Value Proposition and Use Case that need to be thought through in great detail initially, in order to create a realistic business case to justify development. Even then, it’s important to engage with an ODM partner from the outset of the project to explore specification requirements and complementary business models that optimise the project success, rather than risk having to make a difficult phone call later!
Whatever the requirement, Salom is well positioned to deliver innovative, high quality, cost effective wired and wireless power solutions for high volume applications.
Watch this space for further news and don’t hesitate to call to discuss your specific requirements!