Protect your IP through exclusive contractsI think Raouf shared several important strategic points in his last investor presentation.
First he noted that S7 has signed up 22 cable manufacturers, which would have to be everybody who is anybody in this market. Second, he shared that there are important technical competencies in order to know how to integrate the chips into a copper cable. Finally, he noted that he expected competitors to come into the market.
So, how do you protect your IP in a business that will be threated by competitors in the future? As the first mover, be the first to lock up 22 cable manufactuers in an exclusive contract agreement to use S7 chips in exchange for providing the 22 cable manufacturers the technical know how on how to integrated the chips into the copper cable which would then give 22 the cable manufactueres an easy glide path into a new and important growth market, while assuring S7 chips are dominant.
S7 is executing a strategy to box out their competitors and own the ACC market globally for years to come.