Industry Intelligence from Teardowns of IoT and Wearables
This is a paper we’re presenting at the upcoming SMTA International in Chicago, reproduced here so you can take a read prior to our presentation. Comments welcome!
The impulse to break a new gadget to “see what’s inside” is often the first sign someone will become an engineer. However, modern teardowns go far beyond pure curiosity: they provide us critical insights into the nature and construction of these devices. In this paper we will cover the teardown of several smartphone and wearable devices to understand how the SMT industry has changed. These findings will also help us forecast where we are going as a community by discussing miniaturization and packaging, automation and labor force location, device features, and other important topics. These are key issues we need to address to keep U.S. SMT manufacturing relevant.
Figure 1 shows the x-ray of all iPhones in history. This is an important snapshot of the history of SMT assembly for the past 9 years since the iPhone introduction in 2007. The major industry trends can be visualized in this single image: electronics are getting smaller, batteries are getting bigger, and the real estate allocated to the PCB is shrinking. Larger displays with higher resolution require more power. Thinner devices have become a requirement, which in the iPhone 4 led Apple to place the battery on the side of the PCB instead of on top of the PCB. In this paper we will discuss some of the market and technology forces behind these trends.
We have been tearing down devices for several years now with the pure intent to discover how the devices around us work. However, we found that this process of finding how devices are built can give us incredible insights on how the major companies that make them operate.
This ‘under the cover’ knowledge can provide insights into design information, how the product works, innovative design features and even supply chain relationships. Teardowns may also include an in-depth estimate of the bill of materials (BOM).
Supply Chain Exposure
Once a complete teardown is completed, we can determine the exact BOM for the device. This BOM can be used to determine component selection and supplier relationships. It can also, from generation to generation of these devices, help us determine which of these relationships are flourishing and which are floundering.
This data also assists companies to determine the cost breakdown of different devices, as seen in Figure 2 .
The knowledge that a supplier was picked up as a supplier for a mainstream product can have an incredible positive impact on a supplier’s stock price. Similarly, being dropped from the BOM of an iPhone or Galaxy can negatively impact share value.
One recent example happened the day the new iPhone 7 went on sale worldwide. The first teardowns of these devices happened in Tokyo and Sydney, several hours ahead of the Friday launch date in the USA. The public release that a component by Lattice Semiconductor was present in the iPhone 7 caused shares of the Portland company to climb nearly 14 percent. That happened on Thursday on indications the Portland company has signed up Apple as a major client.
Product managers, competitive intelligence professionals, and engineering leads for semiconductor and component suppliers use our product teardowns to identify :
• What socket opportunities would best suit their products?
• What component integration opportunities are available?
• Which techniques their competitors are using for integrated circuit (IC) packaging?
• What their competition is doing that could be an external threat?
Product managers, procurement professionals, and competitive intelligence analysts in device original equipment manufacturers (OEMs) value product teardown reports for critical insights into:
• Who are the emerging electronic component suppliers?
• What are the best approaches to reducing bill of materials (BOM) and manufacturing costs?
• What emerging technologies are being developed in complementary devices that may be integrated?
• What are the best design, sourcing and manufacturing strategies to compete in the emerging low cost environment?
• What are the competitive strengths of new international market entrants?
THE END OF AN ERA
The 3.5mm audio jack is gone. At the recent announcement of the new iPhone 7 and 7 Plus, when Apple executives revealed the end of the audio jack, “courage” was given as a motivation to remove this traditional interface from their new flock of iPhones.
A reasonable observer may also conclude that Apple’s recent acquisition of Beats (a leading headphone maker) also played an important role since iPhone 7 users will likely be in the market for new wireless headphones.
Therefore, we emphasize the importance to pay attention to the merger and acquisitions activities of the major players in the SMT market. These moves might not make immediate sense, but in the case of Apple’s acquisition of Beats, it was a very early signal of a major shift in the way devices are built.
Figure 3 shows an x-ray image of the now defunct audio jack in an iPhone 6S. Figure 4 shows an x-ray image on the same corner of the iPhone 7. The large rectangular object in this x-ray image is the improved Taptic Engine in the iPhone 7 and 7 Plus. This device is responsible for the haptic or kinesthetic communication that recreates the sense of touch by applying forces that react to the user’s touch. Thus we can say that very soon mechanical buttons will be a thing of the past. The ability to emulate the push of a button using haptic feedback greatly improves the reliability (plus water and dust proofing) of the iPhone by reducing the number of moving parts in the assembly.
The empty space found in place of the audio jack in the previous x-ray image initially got us thinking that the audio jack was removed for nothing. However, further investigations when opening the iPhone showed us a new plastic component in that location, as seen in Figure 5.
According to Apple, this plastic component is a barometric vent. With the added ingress protection afforded by the watertight seal, the iPhone uses this baffle to equalize the internal and atmospheric pressures in order to have an accurate altimeter.
The ability to rework wearable devices and smartphones is critical to the subsistence of a growing number of companies in the market of fixing these devices. As seen in Figure 6, the x-ray of the new iPhone 7 Plus shows it is a very complex device with thousands of parts and a complicated process to disassemble. These are expensive devices that can easily be damaged by a single drop on the floor.
The repair market is a $4B/year worldwide industry dedicated to bringing very expensive devices back into commission. The focus of these companies is on the repair and replacement of displays and screens, battery, button and headphone jack (no longer an issue in the iPhone 7), camera and sensor.
To assist in the assessment of the level of difficulty to repair these devices, ifixit  has rated several smartphones and wearables in the market today. Table 1 shows a small portion of this dataset.
This data show that since 2010 the iPhones have been relatively easy to repair. That’s mostly given the fact that the first thing you remove from the iPhone is the screen – and because the screen is usually what you are trying to replace.
Once the screen is removed, the battery is easily accessible. The Samsung phones, on the other hand, have been decreasing in repairability score. The Galaxy S3 was assembled with a very easy to replace battery. The display was somewhat challenging, but nevertheless achievable. However, the new S7 was built with very high tolerance that make it very difficult to repair because :
• The display needs to be removed (and likely destroyed) if you want to replace the USB port.
• Front and back glass make for double the crackability, and strong adhesive on the rear glass makes it very difficult to gain entry into the device.
• Replacing the glass without destroying the display is probably impossible.
We foresee water proofing as a major trend that is driving the electronic design and manufacturing of most wearables and smartphones today. The new iPhone 7, for example, is water resistant to IP 67. However, it is not water proof. The distinction is significant, both from a user experience and manufacturability perspectives. The technologies associated with water proofing electronics such as conformal coating design, application, and inspection, will continue to be the focus of future manufacturing R&D.
As we can see in Figure 1, batteries still take at least 50% of the real estate inside all modern wearables and smartphones. For this reason, a great deal of R&D is focused on increasing the power density of batteries. A smaller battery directly impacts the amount of features – and sensors – that manufacturers can include in their devices. We foresee that super caps will make their debut in the world of smartdevices in the next 5 years.
Apple debuted wireless charging in 2015 with the first edition of the Apple Watch. Although wireless charging has gained mainstream status by other major OEMs – Microsoft, Samsung, Sony, Lenovo – it is still to be found in the iPhone.
Wafer Level Chip Scale Package (WLCSP)
The Apple Watch has one of the densest electronic packages we’ve encountered in our teardowns so far. The system in a package unit (S1 in the 2015 edition of Watch, and S2 for the second edition) is almost fully assembled using WLCSP. As seen in Figure 7, WLCSP is one of the densest packaging technologies available, to the point where the package does not exceed the size of the bare die by more than 20% and solder ball pitch is not larger than 1mm. Handling and assembling these WLCSP devices is a big challenge for SMT contract manufacturers, one that in most cases requires considerable investment in capital equipment for assembly and inspection of these assemblies.
The photograph overlaid onto the x-ray of the decapsulated S1 in Figure 8 exposes its array of WLCSP devices and a quick snapshot of the supply chain for the Apple Watch .
Full Wireless Interface
It is clear that the smartphone industry is leading to the consolidation of the wireless charging standard. Most wearables have already adopted the technology. When water and dust proofing a device, connectors are always the main weak points of the design. Thus, eliminating connectors all together is further incentivized by the need to fully seal the devices, as seen in Figure 9 .
It was surprising to see that the new iPhone doesn’t have a wireless charger, especially when considering that most high-end Android devices already do. However, Apple surprised some users by removing the 3.5mm audio jack. This was, we believe, the first step in the company’s strategy to converge towards a fully wireless architecture for its iPhone line. All battery charging and communications will be done wirelessly, thus removing the need to deploy any connectors in the device. This will further impact the water resistance or proofing rating of the next iPhones. It will also allow Apple to continue pursuing ever thinner devices. We may see such a revolutionary model as early as 2017, when the company is said to bring to market a groundbreaking device for the iPhone’s 10th anniversary.
The new iPhone 7 Plus is equipped with two 12 MP cameras (see Figure 10) – one wide-angle with Optical Image Stabilization (OIS), just like in the iPhone 7, the second a telephoto – allow for optical zoom. The multiple camera trend will continue, as improvements in software and image processing will allow companies to leverage different lens modalities to deliver superior user experience. That also means that contract manufacturers ready to take on challenging mechanical assembly jobs will likely benefit from this trend.
The pursuit for the increasing storage space will continue. Albeit continuous efforts by all major OEMs to move our data to (paid) cloud storage services, local storage still a growing necessity. Some of this need has been driven by a steady improvement in camera resolution, which continues to require increasing levels of data storage.
The process of tearing down popular consumer electronics will continue as a means to gain some insights on how the large companies work and develop their products. In this paper we presented a few of the ideas we have collected on recent teardowns. The major forces in SMT manufacturing will continue pushing US manufactures toward miniaturization. The number of WLCSP devices we find in major devices continues to grow, which tells us they are on their way to becoming a standard.
The impact of this transformation may not be instantaneous. If you are a small or medium contract manufacturer in the US, for example, you can think that these trends don’t impact you. But they do, and here’s how. Even though your customers are not designing product with WLCSP, they will soon not have an option because the large volume players in the market – and the ones the component manufacturers cater to – will give preference to WLCSP. This is a continuous process, similar to what happened to the thru hole components. We still come across manufacturing companies that are now migrating to surface mount components. Progress is inevitable.
This work would not have been possible without the support from the dedicated team at Creative Electron. The authors would like to thank Creative Electron’s team who allowed us to pursue this work.
We had no contact we any employees of the companies mentioned in this paper to write this articles. All analysis is based on publicly available information.
Special thanks to our friends at ifixit who leads the way to keep us free to fix our gadgets.