Opportunities for Innovation

One thing we do know is that business cycles always end. And markets always look very different when cycles end than when they start. The challenge is to understand the structural changes that are going on in our industry in order to be ready for new opportunities as they come along.

One of the key changes we can expect to see is our customers’ growth rates are going to be slower than before. The growth rate of semiconductor content in electronics is flattening out. In addition, average selling prices will continue to decline. In fact, this decline is accelerating as companies compete fiercely for higher market share. The key to addressing these challenges is continuous new innovations that provide new breakthroughs and new ways to solve real customer problems. Agilent Technologies, for example, continued to spend one billion dollars a year in research and development throughout the downturn.

The industry is under constant pressure to develop reliable products faster and at a lower cost. For example, many companies are using field programmable gate arrays (FPGAs) to quickly develop high-speed digital products such as computers and peripherals, mobile phones and others. FPGAs allow designers to combine the functionality of components into very small packages and avoid the time and costs required to develop a dedicated application specific integrated circuit (ASIC). Working together with Xilinx, the market leader in FPGAs, Agilent recently introduced the industry’s first commercially available dynamic probe application for logic analyzer-based debugging of FPGAs. This probe gives engineers a powerful new way to debug complex chips, and it cuts development costs and accelerates time to market for products built using FPGAs.

Another example of innovation is to help our customers improve their quality of services to their end customers. Agilent Operation Support System (OSS) solutions provide telecom service providers with a fully integrated solution that analyzes, detects and troubleshoots problems and certifies devices in real-time across their complete range of wire line and wireless services – right down to their individual customer’s service level.

In the new economy, there are also new business opportunities that provide new stimulus for growth. Consumers everywhere are asking for multi-function devices that are both user-friendly and affordable. Convergence and integration of different technologies made this possible. A great example can be seen in today’s cell phones. These new devices not only provide voice communications – they are also data devices with instant data communications capabilities, as well as personal entertainment devices. By making these new devices affordable and pervasive, new demand for broadband and new distributed models for storage and networking are created.

Agilent is a world leader in delivering components and test equipment to the mobile phone market. Our innovative technology provides components such as embedded cameras, LEDs, RF devices and infrared transceivers to enable smaller phones with a wide array of functions. Agilent is also the number one provider of mobile test and measurement equipment across the entire mobile phone supply chain, from our system-on-a-chip semiconductor test solution to functional test.

Another area of opportunity is the melding of disparate research disciplines such as electronics and life sciences. For example, Agilent’s parallel analog-to-digital converter technology (electronics) is now being used in our mass spectrometers for proteomics (life sciences).

Finally, innovation is not only reflected in products and technologies; it is in everything we do. Business models, operations, customer relationships and employee practices are all integral components of the innovation process.