Consumer Electronics Establishes a Military Beachead

Many of the Military’s most impressive technological advancements – notably the Internet, Microwave technology and GPS navigation – have found widespread consumer application.  However, the product and technology tide is beginning to flow the other way, from the consumer to the military market.  According to the December 12, 2009 edition of The Economist, consumer electronics and video-gaming manufacturers are capitalizing on favorable pricing and technology trends to make small but important inroads into the Defense market.   The business potential for the consumer electronics industry is compelling.  Global defense spending of $1.5 trillion per year dwarfs the global consumer electronics market of around $700 billion.

A number of popular consumer electronics products have found widespread military use, including:

  • The United States Air Force recently order 2,200 Sony PlayStation 3 (PS3) video-game consoles to build a supercomputer cluster to run R&D applications.
  •  American personnel in Iraq and Afghanistan are using Apple’s iPod and iPhones as translation devices and to view intelligence information.
  • In Iraq, soldiers are using Xbox 360 video-game controllers to operate small robotic vehicles and drones used for battlefield reconnaissance.

There are many reasons why Defense departments would be interested in consumer electronics.  Firstly, the price of most high performance consumer products such as graphics cards and processing chips is a fraction of its military-spec equivalent.  Secondly, a dynamic, volume-based global consumer electronics industry regularly delivers technical performance, inter-operability and miniaturization as good if not better than what is available through dedicated defense contractors.  Thirdly, unlike military products, consumer electronics typically coalesce around common hardware and software standards enabling products and components to be used in novel, yet compatible, ways. Finally, procuring commercial off-the-shelf products is often faster and easier than military products.

Given specific requirements and unique conditions, it will never be feasible to replace most military equipment with civilian electronic products.  However, replacing  a modest 5% of military purchases with civilian products could increase total consumer electronics sales by over $75 billion. Many Defense Departments seem amenable to exploring further purchases.  For example, a consortium of British defense contractors, commercial aerospace companies plus Williams (the Formula 1 racing team) has set up a not-for-profit laboratory to study how commercial technology could be used to improve the cost and effectiveness of military R&D work.

What are some key success factors for consumer electronics firms looking to penetrate the military market?

Know your Customer – Obviously, military needs and usage are very different.  The PS3s purchased by the USAF are not something a 12 year old could ever purchase in a Best Buy.  These special units run Linux, a free open-source operating system, and will be networked using Gigabit Ethernet, a commonly used office networking technology.

Treat Defense as a unique channel – Selling to the Military is notably different from selling to consumers & retailers.  For one thing, there is usually an extensive bidding and due diligence process.  As well, securing military business usually requires a persistent, direct-sales approach that often leverages ex-Military personnel as sales reps.

Be patient – Even though military designer and procurement agencies are warming up to commercial products and components, they still move much slower (but occasionally much faster) than their civilian counterparts.

For more information on our services or work, please visit the Quanta Consulting Inc. web site.


3 comments so far

  1. MrBarns on

    I don’t usually reply to posts but I will in this case, great info…I will add a backlink and bookmark your site. Keep up the good work!

  2. Devin Marks on

    I usually don’t post on Blogs but ya forced me to, great info.. excellent! … I’ll add a backlink and bookmark your site.

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  3. bandsxbands on

    It’s interesting to see just how pervasive virtual memory has become in our everyday lives. It seems like everytime I turn my head, I see something with a card slot or USB jack, haha. I guess it makes sense though, considering how cheap memory has become lately…Gahhhh, who am I to complain. I can’t get through a single day without using my R4 / R4i!(Submitted from Nintendo DS running R4i 6Post)

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