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Hardware Makes a Comeback in Silicon Valley

In recent years, Silicon Valley seems to have forgotten about silicon. It's been about dot-coms, Web advertising, social networking and apps for smartphones.

But there are signs here that hardware is becoming the new software.

It is an expansion of a trend that began a few years ago with the Flip videophone, a sleeper hit, and has recently accelerated with Nest, the smart thermostat; Lytro, a camera that refocuses a photo after it is taken; and the Pebble smartwatch, a wristwatch that can interact with a smartphone.

Although the hardware is not manufactured in Silicon Valley, it is being conceived, designed, prototyped and financed here, usually by small start-ups.

What has changed? Each of those steps is speeding up, which cuts the costs and lowers the risks of developing new things.

It's not that software is any less important in Silicon Valley. One reason for the rise of hardware is that it is now so tightly integrated with software. has taught a generation of product designers that an electronic device isn't much without specially designed software that makes it a joy to use.

Instead, any designer now has the ability to quickly experiment with new product designs using low-cost 3-D printers. These printers can churn out objects to make prototypes quickly - a fork, wall hooks, mugs, a luggage clasp - by printing thousands of layers of wafer-thin slices of plastics, ceramics or other materials. Products can be made quickly in contract assembly plants overseas, usually in China.

All of this has given designers and engineers a fast-forward button advancing this technological flip-flop.

“Something that once took three months to make now takes less than a month,” explained Andre Yousefi, co-founder of Lime Lab, a product development firm based in San Francisco that works with start-ups to create hardware products. “With 3-D printers, you can now create almost disposable prototypes,” he said. “You queue it up at night, pick it up in the morning and can throw it away by 11 a.m.”

The rapidly falling cost of building computer-based gadgets has touched off a wave of innovation that is starting to eclipse the software-driven world that came to dominate the Valley in the dot-com boom of the late 1990s.

“If we look hard over the last 10 or 15 years, people don't realize how different the world is now compared to 1996,” said Sean O'Sullivan, a venture capitalist who splits his time between the United States, Ireland and China. “Products like the have driven down the cost of components. You can now easily make connected devices that transform lives in the way we have only been able to do with software before.”

To prove his point, Mr. O'Sullivan recently took teams from nine small start-up companies to Shenzhen, China, for 111 days in which each group developed and began manufacturing new products. He calls his investment firm, based in San Francisco, Haxlr8r (pronounced hak-CEL-erator), and in June the first group of fast-to-market hardware products was unveiled. The companies included Shaka, which makes a simple device for measuring wind for sailboard and kite surfers, and Kindara, maker of an iPhone accessory to help women determine when they are ovulating. (The system automatically generates a text message to the husband at the appropriate time.) There is also Bilibot, a project to build an inexpensive open-source robot.

THE shift away from the Valley's obsession with dot-com services and Web-based social networks is a return to the region's roots. The Valley began as a center for electronics hardware design in the late 1930s, when Bill Hewlett and David Packard built an audio oscillator that Walt Disney used in the production of the movie “Fantasia.” At the start of the 1970s, the label Silicon Valley was coined because of the proliferation of semiconductor companies. In the mid-1970s, a group of computer hardware hobbyists started the Homebrew Computer Club here, which gave rise to several dozen start-ups, including Apple Computer.

Today some of the most successful hardware start-ups in Silicon Valley have been formed from the diaspora of former Apple employees who want to try their hand at companies that pair hardware and software - which is an integral part of Apple's DNA.

Tony Fadell, a former Apple executive who led the design teams on the and iPhone, recently started a company called Nest, which makes a beautifully designed smart thermometer for the home. It is one of the hit home electronics products of the year. Hugo Fiennes, the Apple hardware manager for the first four iPhones, started a company called Electric Imp, which plans to connect everyday objects, like wall outlets and household appliances, to the Internet.

And Andy Rubin, who now heads Google's phone business, worked as an Apple engineer before leaving to help create a series of start-ups, the most recent of which was acquired by Google in 2005. The Android software, tightly integrated into smartphones, has come to rival that of Apple's iPhone.

Hosain Rahman, C.E.O. of Jawbone, a hardware start-up that makes slick Bluetooth speaker systems and headsets, said Apple's influence on design set a standard for who could enter the hardware start-up world. “The bar for great hardware experiences has been set so high by our friends in Cupertino,” he said, referring to Apple's home. “They've raised the overall goodness of hardware.”

“You can come up with a new concept or idea and you can really efficiently figure out if it's a viable product,” Mr. Rahman said. “Now you can test a lot of ideas for a lot less capital and intensity.” But, he warned, “the scaling and supply chain, marketing and distribution is still quite hard.”

Yet even distribution has been simplified by technology. Online marketplaces like Etsy, Amazon and Google's Marketplace allow people to set up shop on any street corner of the Web and begin hawking their latest hardware ideas.

Because of the excitement around hardware, start-ups in New York and Silicon Valley are now vying for venture capital investments. Electric Imp recently closed an $8 million financing round from big-name venture firms. LittleBits, a New York company, just signed a deal for $3.65 million in financing to start mass-producing its tiny tech toys. Mr. Yousefi's company, Lime Lab, was acquired this year by PCH International, headquartered in Cork, Ireland. PCH is a manufacturer that works with start-ups and technology companies in Silicon Valley to build hardware products that just a decade ago would have cost millions of dollars and years to realize.

Liam Casey, founder and chief executive of PCH International, said the ease of making hardware prototypes had contributed to the rise of a new genre of financing with Kickstarter, a Web site that has raised impressive sums for a number of hardware start-ups. Entrepreneurs pitch their idea on the site and ask for donations - often promising the product, or at least a promotional T-shirt, for the cash.

“The money has always been the barrier for hardware,” Mr. Casey said, “and by showing the amount of interest from consumers, start-ups can now create a space that makes V.C.'s feel comfortable investing in their hardware project.”

Ouya, an open-source game console for the television built using Google Android, just raised more than $8 million through Kickstarter. Pebble, the smartwatch that connects to iPhone and Android smartphones, raised more than $10 million after asking for just $100,000.

THE collapsing cost of hardware can be seen in its revival of a hobbyist ethos in the so-called Maker subculture. That ethos is thriving on the easy availability of low-cost computers and sensors.

One of the best examples of that movement is a full-blown $25 computer system the size of a credit card. Designed by a small team led by Eben Upton, a chip designer at Broadcom, the computer is known as Raspberry Pi, and the Valley's hobbyists and start-up fans have seized on it as a breakthrough in innovation. So far, 100,000 computers have been sold, and the Raspberry Pi Foundation is making 4,000 daily - enough to reach almost 1.5 million dreamers in a year.

When Raspberry Pi is almost as cheap as a raspberry pie, the impact on future hardware development will be profound. “People are using this as a catalyst to get new designs to the market more quickly,” said Kevin Yapp, chief of marketing and strategy for Element 14, an international online community for engineers backing the project.

Stewart Brand said that information like software “wants to be free,” said Mr. O'Sullivan, the venture capitalist. “Now hardware is almost as cheap as software.”



Turn Off the Phone and Relax

ONE recent sweltering afternoon, a friend and I trekked to a new public pool, armed with books, sunglasses and icy drinks, planning to beat the heat with a swim. But upon our arrival, we had an unwelcome surprise: no cellphones were allowed in the pool area.

The ban threw me into a tailspin. I lingered by the locker where I had stashed my phone, wondering what messages, photos and updates I might already be missing.

After walking to the side of the pool and reluctantly stretching out on a towel by the water, my hands ached for my phone. I longed to upload details and pictures of my leisurely afternoon, and to skim through my various social networks to see how other friends were spending the weekend. Mostly, however, I wanted to make sure that there wasn't some barbecue or summer music festival that we should be heading to instead.

Eventually, the anxiety passed. I started to see my lack of a digital connection as a reprieve. Lounging in the sun and chatting with a friend without the intrusion of texts and alerts into our lives felt positively luxurious. That night, I even switched off my phone while mingling at a house party, content to be in one place for the evening and not distracted by any indecision about whether another party posted online looked better.

My revelation - relearning the beauty of living in the moment, devoid of any digital link - may seem silly to people who are less attached to their devices. But for many people, smartphones and social networks have become lifelines - appendages that they are rarely without. As such, they can sway our moods, decisions and feelings.

One side effect of living an always-on digital life is the tension, along with the thrill, that can arise from being able to peep into people's worlds at any moment and comparing their lives with yours. This tension may be inevitable at times, but it's not inescapable. It's possible to move beyond the angst that social media can provoke - and to be glad that we've done so.

Anil Dash, a writer and entrepreneur, called this phenomenon the “Joy of Missing Out,” or JOMO, in a recent blog post.

“There can be, and should be, a blissful, serene enjoyment in knowing, and celebrating, that there are folks out there having the time of their life at something that you might have loved to, but are simply skipping,” he wrote.

JOMO is the counterpoint to FOMO, or the “fear of missing out,” a term popularized last year by Caterina Fake, an entrepreneur and one of the founders of Flickr, the photo-sharing Web site.

“Social media has made us even more aware of the things we are missing out on,” she wrote in a blog post. “You're home alone, but watching your friends' status updates tell of a great party happening somewhere.”

It may be that many people are in a kind of with social media and technology, still adjusting to the role that their new devices play in their lives. One day, the relationship may be less fraught.

The influence that technology can wield over our lives may lessen with time - as we grow accustomed to our devices and as the people who use them mature. In Mr. Dash's case, the birth of his son, Malcolm, an adorable toddler who knows how to moonwalk, curbed his appetite for a hyperactive social life.

“I've been to amazing events,” Mr. Dash said. “I still am fortunate enough to get to attend moments and celebrations that are an incredible privilege to witness. But increasingly, my default answer to invitations is ‘no.' ”

Social media sites, which ask you where you are, what you are doing and whom you are with, can cause people to exaggerate or feel the need to brag about their daily lives, said Sophia Dembling, the author of the coming book “The Introvert's Way: Living a Quiet Life in a Noisy World.”

“There is a lot of pressure in our culture to be an extrovert,” Ms. Dembling said. The trick to managing that, she said, is self-awareness. It's crucial, she said, to remember that most people tend to post about the juiciest bits of their lives - the lavish vacations, the clambakes and the parties - and not about the trip to the dentist or the time the cat threw up on the rug.



The Smartphone is a Litigation Magnet

The smartphone in your hand is a marvel of innovation, packing sophisticated computing and communications technologies into a sleek digital device.

It is also a litigation magnet.

In the last few years, the companies in the smartphone industry have spent billions of dollars buying patents and hundreds of millions suing one another. On Friday, that battle reached a peak with the decision by a federal jury in San Jose, Calif., to award $1.05 billion in damages from Samsung for infringing on just six patents.

The case underscores how dysfunctional the patent system has become. Patent litigation has followed every industrial innovation, whether it is steam engines, cars, phones or semiconductors, but the smartphone wars are bigger, global and unusually complex.

And it is the courts, rather than the patent office, that are being used to push companies toward a truce. In the end, consumers may be the losers.

“It is hard not to see all the patent-buying and patent lawsuits as a distortion of the role of patents,” said Josh Lerner, an economist and patent expert at Harvard Business School. “They are supposed to be an incentive for innovation.”

By one estimate, as many as 250,000 patents can be used to claim ownership of some technical or design element in a smartphone. Each patent is potentially a license to sue.

Samsung says it will challenge the jury's decision, which covered design basics like the shape of the itself and its array of small on-screen icons. So the courtroom conflict could continue for years, and even then, the case is but one of dozens of suits and countersuits in 10 countries between Apple and Samsung, the world's two leading smartphone makers.

But Apple has more than Samsung in its sights in its litigation campaign against the Korean electronics giant. Samsung is the leader among companies using Google's mobile operating system. So while Apple may be suing Samsung in courtrooms from Germany to Australia, the real enemy is up the road from Apple's headquarters in Cupertino, Calif., at the Googleplex in Mountain View.

Ultimately, the Apple-Samsung roadshow is just the main attraction in the global smartphone patent wars. The roster of litigants includes Microsoft, Nokia, HTC, Google's Motorola Mobility subsidiary and others.

In a recent case between Apple and Motorola, Judge Richard A. Posner, a prominent federal appeals court judge in Chicago, said in court that the use of patents in the smartphone industry showed a system in “chaos.” In June, Judge Posner dismissed the case, chastising both sides. He heaped scorn on Apple's broad claims for its user-experience patents and on Motorola's claim that Apple should pay a rich royalty on its basic communications patents. Both companies have appealed.

The disputes are fueled, legal experts say, by companies rushing to apply for patents as both defensive and offensive weapons, and by overburdened government examiners granting patents too easily.

“The smartphone patent battles are enabled by lots of trivial patents that never should have been granted in the first place,” said James E. Bessen, a patent expert and lecturer at the Boston University School of Law. “That's where Judge Posner was coming from in his ruling.”

To the winners of the patent wars, the rewards will be rich. Mobile computing, or smartphones and tablets, is the most lucrative and fastest-growing market in business. It has made Apple the most valuable company in the world. As Samsung passed Apple in the last year to become the largest smartphone maker, its profits surged along with its sales.

Despite the hostilities, experts say the smartphone patent wars will eventually end in an industrial armistice.

The California court decision, if it holds up on appeal, could have that effect. “This ruling sends a message to all the handset makers that you have to make truly differentiated products that look different,” said Colleen V. Chien, an assistant professor at the Santa Clara University School of Law. “And that's the message Apple wanted to send with its litigation.”

Most legal experts thought Apple would have the most trouble winning infringement judgments on its design patents, which are generally considered weaker than engineering patents for hardware or software, known as utility patents.

But the jury found that Samsung infringed on three of the four design patents in the case. The fourth was a patent for shape of a tablet computer - a rectangle with rounded corners.

“This could open up a whole new front in the patent wars, as companies race to file applications for design patents,” said Kevin G. Rivette, a Silicon Valley consultant and former vice president of intellectual property strategy for I.B.M.

Yet Mr. Rivette is convinced that the smartphone patent wars will subside and an accommodation will be reached. The sheer number of smartphone patents and the speed of innovation in product development undermine the power of the patents. That is very different than the role patents play in an industry like pharmaceuticals, where a blockbuster drug may be covered by a single patent or a few. In chemistry, the molecule is the patentable idea.

Smartphones are very different. An infringement ruling can slow a rival down for a few months, but not block it. Samsung engineers, for example, have already devised an alternative to one of the patents found to have been infringed upon in the California decision - the “bounce” feature. Pull a finger from the top of the iPhone's touch screen to the bottom and the page bounces. On the newest Samsung smartphones, the same downward finger stroke brings a blue glow at the bottom on the touch screen, not a bounce.

“In this industry, patents are not a clean weapon to stop others,” Mr. Rivette said. “The technology, like water, will find its way around impediments.”



Colleagues and Stargazers Hail Armstrong After Death

By PATRICK MCGEEHAN

Word of the death of Neil Armstrong on Saturday afternoon triggered a torrent of responses on social media, many of them praising the first man to walk on the moon for his inspirational courage enveloped in a humble demeanor.

Other astronauts, entrepreneurs and stargazers from around the world went online to salute Mr. Armstrong, who died at 82 after heart bypass surgery. NASA posted its condolences on Facebook and Twitter, along with a statement from Charles Bolden, the administrator of the agency, that said in part: “Besides being one of America's greatest explorers, Neil carried himself with a grace and humility that was an example to us all. When President Kennedy challenged the nation to send a human to the moon, Neil Armstrong accepted without reservation.”

Within hours of the first reports of his death, RIP Neil Armstrong was one of the most common sentiments posted on Twitter. But some people, including Buzz Aldrin, the British billionaire Richard Branson and Mark Kelly, the astronaut married to former Representative Gabrielle Giffords, had more personal feelings to share.



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