Evolution of Competition
lAs Product and Process Technology Matures
nPerformance/Price Ratio Becomes Favorable
nApplications of Technology Widen
nExample: Carbon Fiber
–Specialty Applications - Aerospace
–Broad Applications - Automotive, Transportation.
nExample: Satellite Positioning Devices
–Specialty Applications - Military, Commercial Marine
–Broad Market - Outdoor Sports, Auto Navigation
nFortunes Made Pioneering Broad Application
Several times in the century of automotive history, materials revolutions have triggered major shifts in design and manufacturing, such as vanadium steel in the Ford Models N and T in 1907-08 or steel to replace wood autobodies in the 1920s. The next such shift, from metals to sophisticated synthetics, has already transformed the boatbuilding and aerospace industries. Cars next
The automotive industry and associated sectors represent directly and indirectly about one-tenth of U.S. employment and consumer spending, and one-seventh of GNP. Cars now use about 70% of the United States' lead, 60% of its rubber, carpeting, and malleable iron, 40% of its platinum and machine tools, 34% of its total iron, ~20% of its aluminum, zinc, glass, and semiconductors, 14% of its steel, 10% of its copper, and 3% of its plastics. Americans alone buying a new 1.4-tonne car about every two seconds.
The extremely high-quality, -strength, and -cost class of carbon fiber used in special aerospace applications (typically "aerospace-grade prepreg") would not be used in cars: it requires manufacturing methods wholly inappropriate for high volume and low cost, and the sort of fiber used in, say, rockets is so strong that it is probably too brittle to work well in autobodies. Intermediate-stiffness structural carbon in a wide range of formats is both far cheaper and better suited to autobodies' needs. •Carbon-fiber is dropping by 30% with each cumulative doubling of production. The carbon fiber suitable for cars costs 97% less in real terms today than aerospace-grade fiber (then the only kind available) cost in 1968. Structural carbon's real price fell by more than one-third just in the past three years. In early 1996, published bulk "creel" (giant spool) prices for 48k-tow structural carbon fiber reached $18/kg ($8/lb); moreover, a major manufacturer, based on its established technology and production plans, published plausible plans to sell for $7/lb or less by the end of 1997 and for only $11/kg ($5/lb) in 2000, both in current dollars. This would require no breakthroughs, but only the next stage of a rather well understood process for changing carbon-fiber production from a boutique into a commodity business--just as glass fiber, whose production volume is now two orders of magnitude larger, did decades ago.