New Q&A on Cirrus logic - Ask The CEO -August 7, 2013
Question August 7, 2013:
Recently you have talked more about your catalog or general market parts. Can you explain how these products fit with your overall business model, which is geared more toward custom products? Is the focus on catalog products a shift in your strategy?
Our strategy is to target specific customers in growing markets that seek to differentiate their products in meaningful ways, based in part on our technology. We are focused on developing custom and catalog parts based on our proprietary technology, and we do not typically develop products that are pin-for-pin compatible with our competitors' existing parts. This means that in the vast majority of cases, a customer must redesign their board to begin using or stop using our products, a process that often takes a year or more. While we frequently establish relationships that lead to the development of custom products, we have a broad range of catalog components that ship to customers. These products are a great way for our teams to engage potential and existing customers and allow us to gain a better understanding of the features they would like to develop. Initial design wins with catalog products enable us get our “foot in the door” at which point we may be able to leverage the relationship into a custom or semi-custom opportunity, if the size of the opportunity warrants it. Interestingly, many of the custom and semi-custom products we ship to leading OEMs today originated with a design win for a catalog product. That said, given the millions of dollars involved in developing a new chip, the volumes involved at many customers do not justify the expense of a custom development, so our catalog parts (such as the ones you see on our website) remain a critical part of our strategy.