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Nowi - The Strategy Overview


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Detailing how Nowi adds value to all stakeholders in the electronics products chain.
By: Anirban Roy - Strategy Intern

Published in: Business
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Nowi - The Strategy Overview

  1. 1. Nowi Energy Strategy Overview Detailing how Nowi adds value to all stakeholders in the electronics products chain Anirban Roy Strategic Design, TU Delft
  2. 2. 2 The uptake of IoT solutions across industries have been slower than predicted by different market research companies. One of the major bottlenecks, battery replacement of thousands of distrib- uted IoT devices drive up the total cost of ownership and slow down adoption. Energy Harvesting (EH) is the use of ambient energy sources (like luminosity, thermal gradients, vibration, sound, etc.) to power electronic components or store energy. The concept is not new, but a number of technological challenges in the past decade have hindered its adoption in the IoT domain. Primarily focusing on low energy applications like IoT sensors and smart wearables market, Nowi Energy designs power management integrated chips (PMIC) to boost the energy harvested from ambient sources. With a mission to power millions of devices and create value to all stakehold- ers, the young technology company from Netherlands is poised to disrupt the wearables and IoT market in the coming years. Adoption barriers of EH and Nowi Energy’s response Three major challenges are described below, two of which were related to the form factor of a PMIC which made it difficult to adopt in different practical applications: PCB size: A typical inductor based energy har- vesting PMIC has an area of 350 mm2, com- pared to a Nowi chip which is 12 mm2 in size. This huge reduction in area creates new use cases which were previously not possible. The Nowi chip can be integrated into smart wear- ables, underskin medical devices and other IoT applications where the overall footprint of the product is a major market driver. 1. 2. NOWI ENERGY - STRATEGY OVERVIEW CREATING VALUE FOR ALL STAKEHOLDERS IN THE VALUE CHAIN External components: The semiconductor man- ufacturing industry is extremely cost competitive and shaving a few cents per component creates a huge competitive advantage. The Nowi PMIC uses one external component compared to more than ten in competing products from major chip man- ufacturers. This translates to a 94% reduction in manufacturing cost. Figure in the right compares production cost of 100,000 Nowi vs Texas Instru- ments BQ25504 chips. A secondary advantage of the Nowi PMIC is low electromagnetic interfer- ence due to an inductor free design which can enable possible integration of the PMIC in the SoC.
  3. 3. 3 End User Benefit Map Maximum Power Point Tracking (MPPT) : A technological challenge to energy harvesting has been the long response time of chipsets to a fast changing external environment. In order to function efficiently, the PMIC of a smart fitness band calibrates itself based on the luminosity at the solar panel (on the surface of a fitness smart band). When the user is walking with the fitness band on, the angle between the sun and the band changes con- tinuously and the calibration has to change fast enough in order to keep operating at opti- mum efficiency. Nowi Energy has developed algorithms which adapts it PMIC to the ex- ternal environment in less than 1 second and does not need any external preprogrammed component in order to achieve this performance. Competing chipsets in the market have a typical response time of more than 15 seconds. 3. Nowi Energy’s solution to these historic challenges not only make energy harvesting a viable op- tion to power low energy devices but also provide discrete benefits to stakeholders in the value chain. A simplified value chain of an electronic product with RF communication consists of 3 players - the Semiconductor RF chipset vendor (Ex. Dialog), the OEM (Ex. Xiaomi), the End User (custom- er using a Xiaomi Mi Band 4). The foundry (Ex. TSMC) and contract manufacturer (Ex. Foxconn) supports the process by manufacturing the components and assembling them to create the final product. The figure below provides an integrated model of how Nowi adds value to each of these stakeholders through its multilayered collaboration approach. End User: The end user can be a smart wearable owner with a clear gain in terms of user experience - the typical battery life of a smart fitness band can be enhanced from a few days to multiple months. In the case of IoT applications, the end user can be the mainte- nance company of an industrial complex with several thousands of sensors spread across the area. A typical added cost of battery swaps for battery operated sensors is provided. As is evident from the table, the increased cost of ownership over 10 years for 100000 sensors assuming a battery lifespan of 3 years and replacement cost of 15 dollars / sensor is ~0.5M dollars. This is the minimum TCO difference and does not take into account the added cost which is context specific and difficult to determine (e.g. cost of shutting down a manufac- turing line for several hours to replace the batteries). 1. An in depth analysis of the model is presented below:
  4. 4. 4 As is clearly evident, Nowi can significantly lower the TCO of IoT systems leading to wider adoption. Level 1 Collaboration (Product): Nowi Energy previously worked with BAM (construction company in Europe) to install road monitoring sensors in the Netherlands. This was a POC project where Nowi manufactured the whole sensor for the end user in order to showcase added benefits and create wider market pull. Semiconductor RF chipset vendor: The backbone of this value chain are a handful of companies like Huawei, Nordic, Qualcomm etc. developing low power RF communication standards and designing RF communication chips for OEMs. Nowi provides strategic ad- vantage to these players in two ways. 3. OEM Customer: The second stakeholder in the value chain, the OEM, generally assembles different com- ponents of a sensor and markets the final product to the end user. A simplified model of a sensor is depict- ed, with the power component at the centre. The first advantage of using a Nowi chip in comparison to other energy harvesting chips lie in the total cost of produc- tion - Nowi’s PMIC system including required compo- nents is 94% cheaper than competing solutions. In an extremely cost driven semiconductor industry, this is a huge competitive advantage for the OEM, enabling 2. better profit margins and strengthening their bottom line. The second advantage is the small PCB footprint of Nowi PMIC which allows integration into consumer electronics like sunglasses and smart fitness bands. Level 2 Collaboration (Component, Component License): Nowi is currently working with consumer electronics companies like Fredrique Constant (Swiss watch manufacturer) and Glorify (high end sunglasses manufacturer) to create limited edition products with energy harvesting. This is the second level of collaboration where Nowi provides its PMIC to be incorporated into the product.
  5. 5. 5 The current RF chipsets have incorporated the MCU and necessary sensors into a single module, leaving only the power component to be integrated (Figure: Sensor system Over- view). Nowi will create application specific design and license its chip technology to the RF chipset vendors for manufacturing SoCs in large numbers and selling to OEMs. Level 3 Collaboration (RF Model Integration License): After a proof of concept phase with Huawei, Nowi Energyis currently in currently in discussions with international RF modem vendors to licence its PMIC technology and integrate into their next generation NB-IoT SoCs. a. b. With an inductor free design and very small footprint, Nowi PMIC is the only chip in the market that can be integrated in order to create a SoC. RF chipset vendors using Nowi’s design can differentiate in the market by offering an integrated SoC to OEMs. It also enables novel use cases in medical, smart city and other domains which would not have been viable without energy harvesting. This in turn broadens the total market scope of RF vendors. The second strategic advantage comes from the energy autonomy gained by the SoC with energy harvesting, thereby removing the need of an external power compo- nent. Conclusion Industries are starting to see energy harvesting as a viable option to significantly lower mainte- nance cost in IoT systems. With a solution far superior to competing products in most relevant parameters, Nowi Energy is a key enabler in the adoption of IoT across industries. A comple- menting strategy which adds value to all stakeholders will play a key role in achieving this vision.