This document outlines key considerations for product management of hardware products. It discusses estimating market size and defining requirements and development processes. Hardware product lifecycles are typically longer than software, involving multi-year planning and costs for prototyping. Operations such as supply chain management, manufacturing, and quality assurance also differ significantly from software. The document provides an overview of teams involved and estimating timelines from inception to production. It also reviews business case modeling and challenges of product launch for hardware.

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How to PM Hardware Products by
Western Digital Sr. PM

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5. Parag Beeraka
T O N I G H T ’ S S P E A K E R

6. ABOUT ME
Parag Beeraka
Director of Product
Management, Western Digital
Lead Product Management of all embedded
and removable storage products for Mobile,
Automotive, Industrial and Surveillance
markets
M.B.A from University of Chicago Booth
School of Business & M.S Computer
Engineering, University of Kansas

7. GOAL OF THE SESSION
At the end of the session, my goal is to make sure
you have enough knowledge to understand what
does it take to build a physical hardware product on
your own or at a company

8. AGENDA
● Introduction - Hardware Products
● Sizing the market
● Requirements & Development
● Business Case
● Operations
● Product Launch

9. HARDWARE PRODUCTS

10. PLETHORA OF HARDWARE PRODUCTS IN
THE MARKET
● Google Home
● Amazon Alexa
● Arlo Security Camera
● Google Chromecast
● Dell Laptop
● Apple iPhone
● SanDisk microSD
● Western Digital External
HardDrive
Alexa Source : http://donthatethegeek.com/amazon-explains-alexa-creepy-laughter/
Google Home Source : https://store.google.com/us/product/google_home?hl=en-US
Google Chromecast Source : https://www.cnet.com/news/get-a-google-chromecast-for-25/
Applephone source : https://www.apple.com/shop/buy-iphone/iphone-7/4.7-inch-display-32gb-black-att
SanDiskmicroSDSource : https://www.sandisk.com/home/memory-cards/microsd-cards/extremepro-microsd
WD Source : https://www.g-technology.com/products/portable/g-drive-mobile-ssd-r-series#0G06052
Arlo Source : https://www.leadsrating.com/security-cameras/security-camera-comparisons/arlo-pro-vs-arlo-pro-2/

11. A FEW NUMBERS TO GIVE YOU
PERSPECTIVE
Source :
Phone Shipments - Canalys Smartphone Analysis (Sell-in shipments) January 2019
Laptop Shipments - https://www.statista.com/statistics/272595/global-shipments-forecast-for-tablets-laptops-and-desktop-
pcs/
Echo Shipments – https://www.statista.com/statistics/796349/worldwide-smart-speaker-shipment-by-vendor/
Units(Millions)

12. 100 Mu PER YEAR translates to..
190/60 = 3 units per second
11415/60 = 190 units per minute
273972/24 = 11415 units per hour
100000000/365 = 273972 units per day

13. MARKET

14. ESTIMATING THE MARKET
Understanding the market is super critical for the
success of your product

15. ESTIMATING THE MARKET
● Market Information
○ TAM - Total Available Market
■ Overall revenue opportunity for a
given set of products or services
○ SAM – Serviceable Available
Market
■ Serviceable Available Market is
the segment of the TAM targeted
by your products and services
○ SOM - Serviceable Obtainable
Market
■ Serviceable Obtainable Market is
the portion of SAM that you can
capture
TAM
SAM
SOM

16. ESTIMATING THE MARKET
Source : https://discoverorg.com/blog/how-to-calculate-total-addressable-market/

17. ESTIMATING THE MARKET
Let us estimate the TAM/SAM/SOM for a new Smart
Battery Case that you are developing for smartphones
Image Sources :
https://www.apple.com/shop/product/MRXK2LL/A/iphone-xs-smart-battery-case-
black
http://www.mophie.com/shop/samsung-devices/juice-pack-samsung-galaxy-s9-

18. ESTIMATING THE MARKET
Need to estimate the TAM/SAM/SOM for a new Smart
Battery Case that you are developing for smartphones
Let us use the Top-Down approach in this case
○ Information that we need
■ Total number of smartphones sold
■ Smartphone split by region
■ Smartphone split by model
■ Consumers Willingness to Pay (WTP)
● Price vs Volume
Key sources to get data –
- Statista
- IDC
- Gartner
- Forrester
- Canalys

19. ESTIMATING THE MARKET – TAM/SAM
Source: https://9to5mac.com/2019/05/09/iphone-north-america-
marketshare/
Source :https://www.androidcentral.com/samsung-galaxy-
s10-
sales-strong-first-quarter-phone-shipments-decline
Let us pick iPhone XR as the first target product because of its
volume

20. ESTIMATING THE MARKET – SOM
Serviceable Obtainable Market (SOM) is the portion of SAM
that you can capture
iPhone XR Volumes -> 4.7Mu per quarter -> ~19Mu per year (Assumption that sales are
equal across all quarters)
Target number of iPhone XR users who would buy the battery case -> 10% (Assumption)
% Share split with competition – 50% (Assumption that there might be one more competitor
in the market)
Target Price -> $100 (Assumption that consumers are willing to pay $100 for your product)
19Mu * 10% * 50% * 100 = $95M business opportunity

21. REQUIREMENTS &
DEVELOPMENT

22. Define the requirements for the iPhone XR
Smart Battery Case
• Size– mAh – 1000, 2000 ? (Translate this to Talk time, Video usage, App Usage etc.)
• Connector – Type-C, micro-USB
• Weight – Shape of the case
• Color – Single color, Multiple colors?
• Materials – Exterior, Interior (Restrictions on materials that can be used – RoHS, ReACH etc.)
• Other capabilities – Wireless charging, Water Resistance etc.
• Other requirements – Temperature, Vibration Proof, Shock Proof, Magnetic Proof
• Regulatory requirements – CE, IEC, UL, UN38.3, ANSI
• Cost Target –
• Schedule Target –

23. COMPETITIVE ANALYSIS
Competitive Analysis is very similar to any Software products
except the Unit dynamics might be different
In order to understand competition, we might have to look at….
Similar products
Competition might already have a similar Smart Battery Charger
Cheaper alternatives – Value convenience over price
Battery Packs https://www.imore.com/best-battery-banks-iphone
Wireless Charging Pads https://www.macworld.com/article/3243053/the-best-
wireless-chargers-for-your-iphone.html

24. PRODUCT LIFE CYCLE
System Design ID Design Component Design
Understand the
features needed for
the product
Understand how does
the final hardware
product will look like
Understand the role
of each the individual
components to
support the features
Prototype
Prototypes can be 3D
printed or built using
low volume
manufacturing
Incorporate
Feedback
Final Design
Incorporate feedback
from Prototype in
both System Design
and ID Design
Final Design for
Production

25. REQUIREMENTS
Product
Requirement
Engineering
Review
Product
Execution
Final
PRD
……
Differences with Software –
• Sometime Requirements in
Hardware cannot be Agile due
to lead times and costs involved
Requirements & Development
Design
Engineering – HW
Engineering – SW
Schedule
PRD1.0
PRD2.0
……

26. IDEA -> MVP -> PRODUCTION
Source : http://formilab.com/how-to-go-from-hardware-idea-to-minimum-viable-

27. Hardware vs Software Differences
HARDWARE
● Multi year Product
Lifecycle
● No A/B testing
● Heavy costs for
Prototype Development
● Heavy Vendor
Management
SOFTWARE
● Features added every
week
● Full A/B testing possible
● Minor costs for
Prototype Development
● Internal stakeholder
management

28. TYPICAL SET OF TEAMS INVOLVED
Product
Marketing
Program
Management
Mechanical
Engineering
Industrial
Engineering
Business
Development
Software
Engineering
Hardware /
Sys
Engineering
Supply Chain
& Factory
Team
Partnerships
Team
Pricing
Information
Technology
Finance

29. Provide rough estimates of how long you think a HW product
can take from inception to production -
• 1 month
• 3-6 months
• 1 year
• 2 years
• 2 years 6 months
• 3 years
The answer is it depends

30. BUSINESS CASE

31. BUSINESS CASE
● Financials
○ Revenue
■ Units
■ Price
● Costs
○ Development Costs
■ Fixed Costs
■ Variable Costs
○ SG&A

32. BUSINESS CASE (SIMPLER VERSION)
Key things that you need….
• Unit Shipment estimates
• Unit Price estimates
• Cost estimates
• Fixed costs
• Variable costs
• SG&A
(Not included)
• Cap-Ex, Depreciation
Initial
Investment Q1 2020 Q2 2020 Q3 2020 Q4 2020 Total
Units (Millions Units) 0.05 0.2 0.35 0.35
ASP ($) 100 90 81 72.9
COGS ($) 50 50 50 50
Revenue (Millions $) 5 18 28 25 77
Gross Profit (Millions $) 3 8 11 8 29
Gross Profit(%) 50% 44% 38% 31%
OpEx (Millions)
Prototypes (Millions $) 5 5
Resources(Millions $) 5 1 1 1 1 9
Total OpEx (Millions $) 10 1 1 1 1 14
Contribution Margin (Millions $) 15
Contribution Margin (%) 20%

33. OPERATIONS

34. OPERATIONS
Source : http://smbp.uwaterloo.ca/2015/06/apple-a-global-leader-in-supply-chain-management/

35. TERMS THAT YOU NEED TO BE AWARE OF
• SCM – Supply Chain Management
• BOM – Bill of Materials
• MOQ – Minimum Orderable Quantity
• CM – Contract Manufacturer
• OEM – Original Equipment Manufacturer
• ODM – Original Design Manufacturer
• CAD – Computer-aided Design
• RFQ – Request for Quote
• AVL - Approved vendor list
• FCC - Federal Communications Commission
• EVT - Engineering verification test
• DVT – Design Verification test
• PVT – Design Verification test
• DFX – DFM/DFA/DFC (Design for Manufacturing,
Design for Assembly, Design for Cost)
•RMA - Return merchandise authorization
• QA – Quality Assurance
• QC – Quality Control
• OOBE – Out-of-Box Experience

36. PRODUCT LAUNCH

37. PRODUCT LAUNCH
B2B
● Need to send product to
customers
● Receive and incorporate
feedback
● Customization for
individual customers
● Need to align the product
with end customers’
product or service launch
B2C
● Launch / Announcement
○ Examples –
■ Galaxy Unpacked
■ Mobile World Congress,
Barcelona
■ Consumer Electronics
Show, Las Vegas
● Consumers need to be able to buy
from stores or order online
● Need to make sure stores have
your product before launch

38. SUMMARY
● Hardware Product Management is very different from Software Product
Management
● But Hardware is nothing without Software, so it is critical for Hardware Product
Managers to know Software Product Management
● Critical skill set for Hardware Product Management
○ Systems knowledge, Operations perspective and general Product
Management skills
● Internet Of Things has paved way to develop quite a large number of Hardware
Products and thus the need for Hardware Product Managers will continue to rise

39. THANK YOU

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