White Paper | Prototyping

Advances in technology, in terms of both hardware and software, mean there are now few barriers for entrepreneurs who wish to enter this market. New hardware or software can easily be incorporated into a handheld digital device that utilises off-the-shelf components. The only limitation is clever design concepts. But even the design concepts can now be market-tested with prototypes that are cheap and quick to develop.

In this paper, technology development company Hydrix explains the changes that have revolutionised the design and manufacture of digital handheld devices, the issues to consider before developing a prototype device and the steps required to create a successful prototype.

Digital handheld devices - evolved

The evolution of digital handheld devices has been rapid since the first commercial multi-functional handheld devices were sold in the early 1990s. These days new handheld devices are being launched weekly as models with more innovative hardware and software functionality are offered to consumers. Driving this evolution is the high demand for these products due to their economy, portability and broad application.

The first handhelds

The first commercial digital handheld devices were calculators that were available in the late 1960s. They were bulky, expensive and had extremely limited functionality. But these devices evolved quickly in the 1970s, and it was not long before most people could afford to buy a small, useful pocket calculator. Handheld devices took a back seat in the 1980s as developers focused on the personal computer market.

In the late 1980s many companies invested in the development of handheld devices for a range of unique applications, in particular the logging or collection of information by employees working outside the office. For example, employees of a utility company could collect meter readings or log the status of repair work. The resources required to develop the specific software applications for these devices was justified by the cost savings and efficiency gains that resulted from their use.

By the early 1990s technology companies started experimenting with handheld computers. The creation of handheld computers presented numerous technical hurdles for designers and manufacturers. Their small size necessitated innovative ideas such as handwriting recognition and clever design of components such as screens, keyboards and batteries. Early examples utilised processors that were not very powerful by today’s standards. This was a significant limitation as developers needed to invest heavily in creating software that would run efficiently on the available hardware architecture.

Multi-functional devices and convergence

By the mid 1990s some large technology companies recognised the opportunity offered by multi-functional handheld devices such as PDAs. A number of these companies decided to develop products specifically for the consumer market. In particular these devices offered connectivity to the Internet and with other devices such as PCs and printers.

The breakthrough PDA product was the Pilot which was launched in 1996. The Pilot created the hand-held computer category and the first workable handwriting-recognition system. It also pioneered the use of e-mail and Internet browsing on a handheld device rather than a PC. The past 10 years have seen the independent development of various multifunction handheld digital devices such as video game players, MP3 players and mobile phones with PDA functionality. These devices are increasingly converging on common portable platforms that have data networking capabilities that rival personal computers connected to the Internet via high-speed cable modems and DSL phone lines.

Technology advances - development hurdles retreat

The resources required to develop a digital handheld product have diminished in tandem with improvements in technology. New devices now use powerful processors and employ much more memory, which means they can use operating systems such as Windows or Linux. These processors are mass produced and readily available to anyone interested in developing a new product.

The ability to support an operating system means new devices can reuse existing software under license. This overcomes the biggest hurdle faced by entrepreneurs as they no longer need to commit huge resources in developing software to find out whether a new design of a digital handheld device will work.

Even the design of circuit boards for new handheld products is now assisted by sophisticated CAD tools that shorten development time. For example, automated routing software can be used to help optimise the layout of new circuit boards.

Most importantly, more people experienced in project managing the design and construction of these devices are now working outside the confines of large technology companies. These people are starting to offer their services to entrepreneurs with new ideas to customise handheld devices for specific markets.

Innovation - the missing link

The constant march of technology presents a myriad of opportunities for smart entrepreneurs. This is perhaps nowhere better illustrated than in the digital handheld market where new hardware and software developments can be utilised to produce a device that is powerful, convenient and affordable.

Endless possibilities

These days there are frequent announcements of technological innovation leading to the creation of new hardware able to complement the advantages of a handheld device. Examples include faster processors, more compact and cheaper memory, higher definition displays, devices that improve connectivity, or even totally new areas of functionality such as Global Positioning or biometrics.

The development of new software is no less dynamic, and much of this software is suited for use in a handheld device or could easily be altered to suit such devices.

Examples include:

• software for entertainment such as games, music or video
  
• business software such as organisers, word processors and spreadsheets
  
• educational course-ware for adults and children
  
• software for industrial applications such as engineering and data acquisition

The biggest opportunities for entrepreneurs are in developing devices that are uniquely configured for a particular application or market place. For example a device that is ideally suited for collecting information in the field might have features such as a rubber waterproof casing, large memory size, GPS functionality, wireless modem and inductive pen sensing. Software could include data collection, email, organiser, calculator and electronic maps.

The door is open for innovation

To date the evolution of digital handheld devices has been in the hands of large technology companies. Ideas for new devices have principally been the responsibility of project teams working within these companies. These teams are dominated by hardware and software engineers. As a result the great majority of new digital handheld devices that reach the market are simply previous models that have been upgraded with new hardware and software and occasionally new functionality.

Although the market for digital handheld devices is large, competition is stiff and some players have already withdrawn from the market. Some industry observers believe that within a few years only two or three large companies will design, manufacture and market their own devices. If this trend does continue it could reasonably be forecast that the level of innovation in this area will decline.

Hydrix expects this trend will in fact serve to spur innovation. Driving this innovation will be entrepreneurs leveraging opportunities to market digital handheld products custom-designed for customers with specific needs not being met by existing developers. Until recently the risk involved in testing the viability of a new handheld device was too high for most entrepreneurs. Because the use of prototyping substantially reduces this risk, Hydrix anticipates entrepreneurs will move quickly to exploit market niches.

The benefits of prototyping

Prototyping is a very effective tool. The dictionary defines a prototype as an original model after which everything is patterned. This is certainly true, but different types of prototypes also have capabilities beyond basic modelling, which are equally valuable to business. This value comes from providing an affordable solution for a difficult problem, the problem of testing an idea.

Three keys to success

To successfully market a new digital handheld device a developer needs to satisfy three fundamental requirements in this order:

1. Will the device concept work in practice
2. Is there a market for the device
3. Will the device satisfy market requirements

For digital handheld devices the first question can be answered by experienced software and hardware engineers based on their knowledge of existing technology. The second and third questions are more challenging but cost-effective solutions can be produced using alpha and beta prototypes.

A market prototype is a prototype that can effectively demonstrate the key functionality of the concept device. It typically incorporates the key hardware functionality of the proposed entity and uses an interface designed to mimic the functionality of the fully operational product. A market prototype is fast and inexpensive to create. The interface software can be compiled in a matter days while the physical device can be constructed in a matter of weeks.

A test prototype fits the definition of an original model after which everything is patterned. It encapsulates all the desired functionality of the concept device using a fully integrated user interface. The physical design of a test prototype is also the model for the final product subject to subsequent changes based on the results of testing. A test prototype takes longer and is more expensive to develop than an alpha prototype. Its hardware and interface software design takes three to six months to complete.

Market prototypes

Once a developer confirms that a device idea is practical, the idea can then be tested on potential consumers using market research. The best practice method to research the market potential of a new device is gather feedback from potential customers who are given the opportunity to see a demonstration of a prototype device.

Developing a fully functional prototype (a test prototype), first up, is a risk because there is no guarantee that the prototyped device will eventually go into production. A more cost effective alternative is to construct a market prototype. This prototype demonstrates the functionality of the concept device and helps potential customers visualise the end result.

Case study 1 - Visa verification device

A government immigration department tenders out for a secure and convenient method of verifying the visas of citizens from their country. An IT consultant with a track record of implementing system solutions for government departments wants to pitch the concept of a digital handheld identity checking device that incorporates biometric sensor and smart card technology.

The prototype developer analyses the concept and determines the device is feasible. The IT consultant contracts the developer to construct a market prototype. The developer makes the prototype in three weeks using standard PC components integrating a biometric sensor, smart card encryption and reader. The market prototype also employs an interface that controls enough basic functionality to successfully demonstrate the device.

The device is demonstrated to the immigration department of a country experiencing a large amount of visa fraud along with specifications of a potential test prototype. The immigration department is impressed with the demonstration. The department agrees to fund the development of a test prototype that incorporates a number of features to meet its specific requirements.

Test prototypes

A market prototype can help an entrepreneur determine whether or not there is a market for the device but it cannot guarantee that device will be successful once it is launched into the market. Experience shows that there is no way to be certain that a new product will be successful. But one way to minimise the risk of failure is to verify that the final product satisfies market requirements. This is where the test prototype finds its role.

A test prototype is created to be as much like the final desired product as possible. Once constructed the hardware and software of the prototype can be rigorously tested and altered if necessary to ensure the final product meets market requirements. A test prototype can also be field-trialled and feedback from these trials can be used to fine-tune the commercialisation of the final product.

Case study 2 - PDA for school teachers

A computer leasing company that has a big contract to supply public schools with computers and peripherals sees an opportunity to market an inexpensive PDA specifically designed for school teachers. The concept PDA is differentiated by a design that incorporates inexpensive components as well as software and connectivity that integrates with existing hardware and software used by the public school system.

The concept is pitched to the education department. The department likes the concept but would like to see evidence that school teachers would use the device in practice. The computer leasing company contracts the developer to construct 10 test prototypes. The developer delivers 10 fully functional prototypes within three months. The prototypes are given to ten school teachers to trial for another three months. The trial is successful and feedback from teachers is used to calculate efficiency gains and to improve the final product. The Education department places an initial order of 10,000 units.

Successful prototyping process

Defining the concept

The project kicks off with a free consultation between the developer and the client to discuss the product concept. The developer is very interested in the target market from the perspective of understanding what the device is going to be used for, who is going to use it and the environment in which the device will be used. The client may also have strong ideas about some or all of the device specifications.

If the device concept encompasses predominantly existing hardware and software components, the developer may be in a position to say that the concept is feasible at this first meeting. However if the concept requires the integration of new hardware, significant software customisation or a new design concept, then the developer may need to research the concept further. If the concept is later deemed not to be feasible then the client can consider the option of returning with a different concept.

At this meeting it should also become clear whether the client initially needs a market prototype or a test prototype. Regardless of which type of prototype is needed, the developer always works towards the creation of a test prototype. In this respect the creation of a market prototype is a subset of the test prototype project unless feedback following the demonstration of a market prototype results in the project not proceeding.

Either at the meeting or shortly after, the developer will provide the client with a firm quote on the cost of the next step of the process.

Presenting the concept

After completing any necessary research the developer puts together a report which outlines its understanding of the device concept together with one or more options for the specification of a test prototype and a market prototype (if required). The report includes recommendations with respect to hardware, software and design specifications based on the developer’s previous experience. The report includes rough estimates on timing and cost.

Contract negotiations

The client has some time to consider the report. If the client decides to proceed to the next stage then an initial meeting is arranged to discuss the client’s preferred options, the project budget and time-frame. The developer responds to this meeting with a plan accurately detailing cost of materials, time and labour to create a test prototype and a market prototype (if required). The plan will also estimate the per unit cost if the device goes into production. This is generally the stage where any financial negotiations take place between the client and the developer.

Some developers might contemplate taking an equity interest in the project to sweeten the deal for the client. The contract may have two stages: 1) creation of a market prototype, followed by 2) the test prototype. In this situation the client has the option to delay agreement on the test prototype pending the outcome of demonstrations of the market prototype.

Prototype development

Once the contract has been signed the developer implements the agreed project and keeps the client regularly informed about its progress. An experienced developer has the ability to make accurate work assessments; this reduces the likelihood of missed deadlines.

Hardware and software development proceeds in tandem with close communication between hardware and software engineers to ensure that any complications that arise do not cause unnecessary delays or duplication. Once completed, both software and hardware are rigorously tested on the prototype before the handover to the client.

Copyright 2004-2009 Hydrix Pty Ltd. All Rights Reserved. Hydrix is a registered trademark.
This communication provides general information current as at the time of production.
It is not intended that the information provide advice and should not be relied on as such. Professional advice should be sought prior to actions on any of the information contained herein.