Despite the success achieved in the last few years, it is questionable whether and how Arduino and others OSH players will run in the future. What emerges from the interviews with the operators, who recognize the success of Arduino, is that when the company grows in size, costs matter more, thus the operators might shift to a cheaper platform (even if not made in Italy and tested personally). One of the reasons is that Arduino derivatives and clones are focusing more on the performance direction, so they are providing users stronger platforms.
The open environment in which Arduino operates allows anyone to easily enter the market. However, “the barrier to entry isn’t a monetary one, it’s a philosophical one. This requires boldness and getting out of committee-think”, and Arduino with its huge community it is still very hard to catch up. Historically, cheap companies are the ones that usually make the platforms. Currently, established actors flood the market with subsidized hardware in order to beat the 26 euro price of Arduino board. However, this “standard war” does not matter for Arduino: they have the biggest OSH community, a factor extremely difficult to reach for any new entrants.
In this way, competition increases the pace of innovation, performance will be higher and according to Torrone: “I think it’s what we all want, whether it’s called an Arduino or not.”
Communities are aware of the fact that Arduino is based on social hardware, so they keep supporting it. This is why Arduino is moving towards the “mass direction”: they are trying to mass-produce the boards entering in educational institutions like middle and high schools. Therefore, increasing the size of the community will make it harder for imitators to reach a bigger number of users.
However, a new strategy has been declared by Arduino in order to face competition and protect its leading position from the incoming clones and derivatives. The new strategy is based on four main points:
- I. Branding and Communication
Arduino was an unbranded name till September 2010, but finally it got a logo which enabled the team to create a new image for the project. This includes new packaging, new graphic design of the boards themselves, stickers and new templates for the website. This new strategy is still focusing on the importance of “made in Italy” products.
The brand was designed by ToDo agency, run by Giorgio Olivero who was a Banzi’s student at the IDII. Moreover, Arduino is leveraging more on the blog, where it is shown what people are doing with Arduino.
Figure 10 The Arduino logo
Furthermore, they registered the trademark in the USA and the rest of the world in order to protect the brand from people who are misleading the community by pretending to be selling original Arduino products or even representing Arduino in a certain country. Consequently, they want to develop a stronger brand in order to differentiate themselves from the clones and let customers to identify much better the original product.
Figure 11 Arduino Packaging
- II. Arduino Store
Arduino team recognizes that users would like to have an Arduino branded webstore where people can find products made by various members of the Arduino ecosystem.
They decided to do it now because “we have resisted doing this in the past because we didn’t want to interfere with the sales made by distributors but we feel that now their business is strong on its feet and users added value is quite clear” said Banzi. Through the store, a real Arduino company is willing to sell also complementary services to users who already bought an Arduino and at the same time expand their product lists. The store will be also the driver of selling users projects already developed and gadgets development by users but not physically produced yet. The store should be opened at the end of February 2011.
In the store, they will be sold also two new boards (and upcoming products that will be announced): firstly, Arduino Uno (easier name than the Duemilanove “to be nice to the non-Italians and use a name that was simpler to pronounce and write” said Banzi) and secondly Arduino Mega 2560 (an upgrade of the Arduino Mega which makes some significant savings due to improvements in the production process and better pricing thanks to suppliers who are happy to pass on to customers). Finally, a new Arduino Ethernet is among the planned upcoming products.
- III. Tinker Toolkit
Arduino have decided to provide a modular system of sensors and actuators which can function as a teaching or a prototyping tool as well as a production of ready kit to build permanent installations also for users. In fact, it has been used exclusively in client projects and sold to institutions like museums, universities and design studios.
In order to move Arduino towards the “massive direction”, Banzi is currently focusing on the educational aspect. In fact, from the school year 2009/2010 he is promoting Arduino in schools in order to involve it in prototyping activities that schools should not have big issue given the lower cost of the boards. At the same times, they are creating a specific social network only for teachers where they can share insights about Arduino and how to use it for educational purposes.
In addition, the User Generated Content fostered by the teachers can be shared among teacher communities everywhere, helping even more the development of school projects.
Therefore, Arduino can reach sooner a bigger mass of users in order to protect themselves more effectively from derivates and clones which are trying to catch up. Having a bigger community can enhance even more the social hardware aspect, so Arduino can sell more services to users who already hold an Arduino.
These new strategies raise interesting points in the framework of the research. In fact, Arduino recognize the importance of users who wants to commercialize their projects. Many of them are not translated into successful business projects due to some barriers that prevent users to sell their innovation. The new Arduino company with the new store could meet the needs of these users, given that they can do massive production and get advantage of more than 100 distributors worldwide under the Arduino name. In fact, Banzi is reluctant to give licence to use the Arduino brand name, which is the most valuable asset of the company, given that the licensee can produce more products which embed an Arduino who is selling thousands under the Arduino name, but using a cheaper clone or a derivative, that can damage the all brand. As a result, some discussed points may be revised in the light of the future results of the newly declared strategy, given that entrepreneurial opportunities created may start to benefit directly Arduino founders. Nevertheless the consideration made from the analysis, along with the positive trends showed, lead to be quite confident about Arduino’s future.
Overall, new strategies are likely to strengthen the protection of the OSH ecosystem from external actors, who might use the Arduino Brand in an unfair way, with the only mission to make profit against the entire environment.
 Source: Phillip Torrone http://blog.makezine.com/archive/2011/02/why-the-arduino-won-and-why-its-here-to-stay.html fist accessed 12 February 2011