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Unformatted text preview: thro ugh the service.B. Greeley and E. Ombo k, “In Kenya,
Security Cash o n a Cell P ho ne,” BusinessWeek, September 8, 2011. M-P ESA is spreading to
o ther regio ns and is even used in Af ghanistan, while similar schemes are o f f ered by f irms such
as WIZZIT in So uth Af rica and GCASH in the P hilippines. The “mo bile pho ne as bank” may
bring banking to a billio n unserved custo mers in a f ew years. K E Y TAK E AWAYS Moore’s Law applies to the semiconductor industry. The widely accepted managerial
interpretation of Moore’s Law states that for the same money, roughly eighteen months from
now you should be able to purchase computer chips that are twice as fast or store twice as much
information. Or over that same time period, chips with the speed or storage of today’s chips
should cost half as much as they do now.
Nonchip‐based technology also advances rapidly. Disk drive storage doubles roughly every
twelve months, while equipment to speed transmissions over fiber‐optic lines has doubled every
nine months. While these numbers are rough approximations, the price/performance curve of
these technologies continues to advance exponentially.
These trends influence inventory value, depreciation accounting, employee training, and other
managerial functions. They also help improve productivity and keep interest rates low.
From a strategic perspective, these trends suggest that what is impossible from a cost or
performance perspective today may be possible in the future. This fact provides an opportunity
to those who recogniz e and can capitaliz e on the capabilities of new technology. As technology
advances, new industries, business models, and products are created, while established firms and
ways of doing business can be destroyed.
Managers must regularly study trends and trajectory in technology to recogniz e opportunity and
avoid disruption. QU E S TI ONS AND E XE RC I S E S
1. What is Moore’s Law? What does it apply to?
2. Are other aspects of computing advancing as well? At what rates?
3. What is a microprocessor? What devices do you or your family own that contain microprocessors
(and hence are impacted by Moore’s Law)?
4. What is a semiconductor? What is the substance from which most semiconductors are made?
5. How does flash memory differ from the memory in a PC? Are both solid state?
6. Which of the following are solid state devices: an iPod shuffle, a TiVo DVR, a typical laptop PC?
7. Why is Moore’s Law important for managers? How does it influence managerial thinking?
8. What is price elasticity? How does Moore’s Law relate to this concept? What’s special about
falling chip prices compared to price drops for products like clothing or food?
9. Give examples of firms that have effectively leveraged the advancement of processing, storage,
and networking technology.
10. What are the five waves of computing? Give examples of firms and industries impacted by the fifth wave.
11. As Moore’s Law advances, technology becomes increasingly accessible to the poor. Give
examples of how tech has benefited those who likely would not have bee...
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This document was uploaded on 01/31/2014.
- Winter '14