Outsourcing Decreases Time-to-Market - A Case Study

With the reduction of product life cycles and increasing global competition, manufacturers are increasingly turning to outsourcing as a means to accelerate time to market, while remaining cost competitive. No where is this more true than in the consumer electronics industry.

Sonnet Technologies learned this lesson after struggling to remain competitive in the Apple Computer "after updating the market" business. Headquartered in Irvine, California, Sonnet Technologies has succeeded in diversifying its offerings with the updates, after the market for computer processing unit (CPU), peripheral component interface (PCI), postcards and other enhancement products for line of Apple products including the iPod range of best selling products.

The challenge for Sonnet Technologies has been to anticipate the needs of the consumer, keeping pace with the constantly changing dynamics involved in the evolution of Apple products. This obliged them to react quickly to change their product line and deliver the products when the market wanted them, this has proven to be easy for Sonnet Technologies.

Currently with 60 employees, Sonnet Technologies is the world's leading Macintosh hardware upgrade that offers upgrades for more Macintosh models than any other company. Their continued success is largely due to a staff of senior technicians, who devote all Macintosh users. They are guided by their personal desire to invent new ways to improve the speed of current Macintosh computers and therefore the productivity of Macintosh owners. With a strong emphasis on customer service, Sonnet offers 24 hours, seven days a week technical support service.

With the advent of new products from Apple, such as iPods and laptops, Sonnet Technologies realigned its strategy to focus on iPod accessories. Sonnet has had the idea of ​​an FM transmitter to transmit wirelessly and play files iPod to the radio. Sonnet Technologies engineers, although they know the methodology of Apple, but lack the skills and knowledge in FM transmitters, provided a brief interval of time before the introduction of this new product.

After a frustrating year trying to build the transmitter, Sonnet Technologies finally decided to hire an ODM (Original Design Manufacturer) to develop the FM transmitter in Taiwan. Within six months, "offshore outsourcing", the Taiwan-based team successfully designed the transmitter. Unfortunately, this delay in the development, production and shipments of FM transmitters Sonnet Technologies has caused to lose the first mover advantage for a premium product with high margins. While Sonnet Technologies had planned to sell 20 000 per month for their four models of transmitters, the delay slowed sales to 5,000 units per month.

After having learned an important lesson of outsourcing, Sonnet Technologies knows that to be competitive in a high stakes game like Apple Computer after the market sector, they must know their own in-house strengths and weaknesses. They also learned the importance of design and technology put in place, within the constraints of time is crucial in this global market of today. In their case, outsourcing was the right decision even though a late.

Epilogue: Sonnet guarantee delivery on any in stock within 24 hours and all the build-to-stock items within 48 hours. These basic skills have seen Sonnet Technologies won numerous awards, including being on the Deloitte & Touche "Technology Fast 500" two years in a row .......