Law of conservation of modularity

When I applied the modularity dichotomy to smartphone operating system there were several implications that came to light. One was the question of whether the market has reached the point where products were “good enough” and the speed of innovation became less important than price. Another was: will integrated vendors be able to hold on to a healthy share of growth against non-consumption?

Now I bring up another implication of modularity: the concept of “law of conservation of modularity”.

Clayton Christensen illustrated this as follows[1]:

If you are writing a software application to run on top of a platform, are you permitted to modify the platform to make your application run better?

If the platform is interdependent, changing it could cause unintended side-effects and you will not be allowed to make them. If the platform is modular, changes are possible and you will have access to the code.

The reason is not not political. It’s that in the case of interdependence, the application has to be suboptimized and conform itself to the platform so that the platform could remain optimized (to its goals). The platform needs to remain optimized is because it needs to keep improving (since it’s not good enough).

In the case of modularity, the application can be optimized and the platform can conform itself to the application because the application needs to keep improving while the platform is good enough and does not.

Conformability is what constrains up-market progress.

This also holds in hardware architecture. This was plainly evident in the WinTel era. During that time the microprocessor and the operating systems had a proprietary and interdependent architecture even while Dell’s product has a modular architecture.

So the microprocessor wasn’t good enough. That meant that the desktop computer had to have a modular architecture to conform itself in order to allow this to be optimized because the line widths on the circuit were not good enough.

This is what is meant by conservation of modularity: one side or the other of an value chain boundary needs to be modular and conformable to allow what’s not good enough to be optimized. The key question is what’s not good enough: the device or the platform (the whole or part?)

How does this apply today in the post-PC era?

If you think about it in a hardware context, because historically the microprocessor had not been good enough, then its architecture inside was proprietary and optimized and that meant that the computer’s architecture had to be modular and conformable to allow the microprocessor to be optimized. But in a little mobile computer like the smartphone, it’s the device itself that’s not good enough, and you therefore cannot have a one-size-fits-all Intel processor inside of a BlackBerry or iPhone, but instead, the processor itself has to be modular and conformable so that it has on it only the functionality that the BlackBerry needs and none of the functionality that it doesn’t need (hence the ARM modular architecture is dominant). So again, one side or the other needs to be modular and conformable to optimize what’s not good enough.

Now today (and, I believe for some time to come) in smartphones, or in any situation where logic gets embedded in a system it’s the device itself that is not yet good enough and, therefore, you cannot back off the frontier of what’s technologically possible. It has to be optimized with a proprietary interdependent architecture. That means that the processor and the operating system inside of a Smartphone has to be modular and conformable to allow that to be optimized.

In order for you to believe otherwise you have to convince yourself that smartphones, as a system, have reached the limit of what is technologically possible.

[1] The source is a presentation by Clayton Christensen at  Open Source Business Conference in 2004

  • Кind of hard to wrap my mind around this. So until Apple came into the scene, we were essentially forced into buying better processors but not better computers. The key supplier to the PC era was the CPU manufacturer and they had only vested interest in improving the processors. Everything around them was modular.

    Now Apple comes and the key component they proceed is the whole phone. They are interested for the device as a whole to improve, not any specific part. Without improving the microphone, can can improve the sound reception by placing several microphones and using noise cancelation software. Everything become a module to the integrated nature of the end user experience.


    • asymco

      It wasn't just when Apple came along. The law applies to BlackBerry or any other devices. Integrated devices are a characteristic of the post-PC era.

      And let's not forget that PCs were initially integrated as well (e.g. Apple II).

  • Steko

    One thing that this suggests is you can have two interdependent aspects but to satisfy this law they will create a modular level to communicate through (technically that puts the cart before the horse but same deal). The whole of a complicated platform (like a smartphone) could then have several different "hard" interdependent components (bones) held together with flexible modular components (flesh).

  • Don't forget that even the Wintel PC was originally integrated. The only reason it became modular was because Compaq built a "clean-room" implementation of the IBM PC BIOS and so created the clone market. IBM was opposed to this and tried to reassert control with the PS/2, but it was too late.

    I don't really know what you are getting at with this post – "The microprocessor wasn't good enough" means what, exactly?

    • Paul,
      If any generic processor was "good enough", then the WinTel era would not have caught on.

      Early on, the CPU was struggling to handle the demands of the PC OS and software applications.
      Intel tightly integrated the various processor elements (cache, alu, mmu, co processors, and so on) to get best performance on given process geometry.
      Intel edged out their competitors (Mot and Zilog) because Intel as had better support for developers.
      (its int Davidow's book, "high technology marketing")


      • Davel

        I beg to differ. The motorola 68000 architecture was superior to 86000. Unix machines were mostly built on 68000. Wintel worked because of cost and applications. The apple 2 was the leader in biz computers for small businesses. Jobs killed the apple line in favor of the Mac which was less flexible and did not cater to small business. IBM backing and lotus/wordperfect made wintel

      • Davel,
        Agree, other CPUs were better, but developers adopted the Intel CPU (on PCs, not Mac) for a number of reasons.

  • Horace,
    We are early in the post PC era. The smartphone computer is far from being good enough. It requires interdependences to properly optimized.
    One aspect is the many new sensor technologies coming available to mobile phone makers in 2011/2012. Exploiting these properly requires "work" only a the integrated vendors can do.

    Some but not all;
    – multi-sensor cameras
    – mems gyros
    – IR sensors

    I read Clayton's books about 3 years ago. Great you applied his concepts to the mobile industry.


  • Horace,
    I guess a corollary to your post can be phrased: " why optimized processors don't get designed-into mobile phones".
    This explains why Intel has never been successful in mobile phones.
    [ They are trying again having acquired Infineon and licensed some LTE protocols ]


  • A very Qt post…

  • Iphoned

    Not all of us are as smart as you are. Or it could be just me. Can you make you point in simpler terms?

    • Steko

      He believes the platform is not mature yet and so we'll see integrated devices capturing the profits for the foreseeable future.

      OTOH if the platform is mature, we'll see android's modular approach putting increasing pressure on Apple's profits and the industry moving towards integrated hardware and consumers increasingly motivated by spec sheets instead of brands.

      • Steko

        "moving towards integrated chipsets"*

      • Prices rather than specsheets tho?

    • asymco

      This is not an easy concept. I will try to make it clearer.

  • berult

    In a closed physical system, entropy increases; the third law of thermodynamics. Within a system, if entropy decreases locally it has to increase proportionally more somewhere else within the system. A running system-wide disorder is the price to pay for a bit of localized space-time order.

    All the way eventually to black hole non-dimension whereby entropy is near infinite. The system collapses onto itself to an all sucking nothingness of probabilistic uncertainty.

    Hence, a paradigm shift. Apple comes along, organizes, integrates, and generates disorderly market reactions that, at cycle's end, engulfs the whole market into chaotic nihilism. 

    Mid-cycle Mac; end-of-cycle iPod; upstart iOS-OSX; either a new paradigmatic idea and concept, a drift into Brand commoditization, or overall end-of-cycle extinction. The cycles are much easier on Apple; they've been riding self-made paradigms since birth.

    Now, about the first law of thermodynamics, the conservation of energy, can it teach us on system equilibrium for any random "universe" ? A matured mobile platforms market is sufficiently closed upon itself to function as a theoretical universe. The quantity of marketable energy thus is constant. But it's obviously not uniformly distributed across all of the remaining universal agents.

    The question arises as to how a given amount of energy will wander and aggregate within the mobile platforms universe. It depends largely on size. Small equals random as in particle physics. Large equals universal attraction as in astrophysics. In terms of dominant force. 

    Large, mobile platforms market will become, one can feel a mobile epiphany throughout mainstream consumers. So we're dealing with gravity here, mainly. Remember, the first law has to link up with the third law to make it relevant.

    First significant entrant causes "loose" entropy realignment among participants; a small unbounded region of ordered elements, iOS, and increasing entropy, disorder, for the rest. The universe acquires relevancy through "paradigm shifting" type disruption, grows large enough to close upon itself, traps threshold energy into morphing as a constant, and the whole universe becomes entrapped in gravitational forces that pull run-away entropy down into pure universal anonymity. The sheer relative weight of localized absence of entropy, iOS integrated ecosystem, in a universe of great magnitude, takes monopolistic visionaries on a one way trip down memory lane.

    Hence, Apple has a stake, a vital one, in creating a product embedded into "controlled entropy" competitive regionalization. It pushes back the inevitable. 

  • Iphoned

    Meanwhile, Android just gobbles up share. How does the theory explain that?

    • asymco

      The theory (or any theory) cannot be used to explain or predict events on a time scale of a few months. It's at best useful on a five year scale, more typically on a 10 year frame. I've been watching the smartphone market for about 12 years so far and it's been pretty accurate.

      • foobar

        Hey, dipshit, the THEORY, any fucking THEORY, if it is indeed a THEORY and not some crap you pooped out of your brainhole onto the internet, is a theory exactly because it can predict shit at any scale & beyond experiments we can imagine today.

  • This is the most interesting topic in tech right now. At least for me. When will innovation slow in smartphones?

    • asymco

      It looks like near field communications (or RFID or mobile payments) will be a big area of improvement in the next few years. That has been a goal for many years, but it looks like 2011 will be the big year for that. Many other things will also evolve: multi-screen experiences: sharing or moving content between screens (AirPlay) etc.

      The list of possible improvements is endless. It's only a question of whether these improvements require an integrated approach.

  • timnash

    The danger of 'good enough' is that it gets used in too many ways and it depends on your perspective as to how true it is. For the vast majority of PC users, Windows is 'good enough' but if you are looking to invest in the PC market only a few companies are worth considering because most companies' PC profits are not 'good enough'. A real issue with Android is that few companies other than Google (through ads), Samsung and HTC are making money from it and the gold rush won't be sustained if the profits for many companies aren't 'good enough'.

    • Very true. But for SEMC, MOT it's about survival. They didn't really want things to turn out like this.

      Then there's the Taiwanese HW guys (netbook companies) who will be happy with a commoditized HW market. They'll just adopt cost-leadership strategies as they have with PCs.

      • timnash

        Unfortunately survival in a market only works as a short term strategy. While the smartphone market is expanding so quickly management will convince themselves they are in the right place, but unless a company can build up reserves through profits from a market, the company is better off exiting the market. Hence the split of Motorola, so that losses in cellphones don't pull the rest of the company down.

      • Well put.

  • dchu220

    Dear Horace,

    I think an interesting subject would be the strategy of Apple and Android towards third parties. The interesting thing about Android is it broke Google's usual stance of this is the system we've developed for you, take it or leave it.

    Apple seems to try to create business models for third parties. They might now always get it right, but you can tell that they do want to attract the best to their platform. (They probably don't care if mediocre developers hop on or not.)

    • asymco

      Not sure I understand the question. Is the question whether Apple offers a reliable platform vs. Android?

  • Horace. You've made a good case (I hope I haven't misunderstood you) that the Google Android strategy is not exactly fully baked (Microsoft/Verizon tie-up, ability of any operator or OEM to fork, all stakeholders except Google wanting fragmented OS market, lack of profits in Android OEMs… ).

    I would be really interested to hear how you think this plays out for Google? It seems to me that (because it is an open source SW) they have only "soft" power over the platform. They take on the main burdern of development, decide the release schedule and feature set, but once they've released the code it's in the wild. Their oft quote reasoning is that "the more people use the internet, the more money we make", but if they can be shut out by operators, OEMs, how does this play out?

    Is Android just the stop-gap before Chrome?

    • asymco

      I can't say how it will play out. When Google announced plans for Android in the fall of 2007, I looked at it as the natural disruption of Microsoft's mobile strategy. They would essentially offer good enough Windows Mobile equivalent software to modular phone vendors at no (immediate) cost. This was very likely to sweep the field especially if the product was more competitive than Windows Mobile.

      But I also knew then that Windows Mobile was not a particularly successful approach to the market. So it stood to reason that Android would capture the bulk of the modular market which could maybe make up 20% of the total market.

      As the smartphone market accelerated even faster than most expectations the land grab and gold rush that took place may offer a bigger share to Android than what might have happened with a non-free OS. However, long term there are likely to be limits to what Android can achieve in terms of base. We have to also consider how likely first generation Android users will be to stick with the platform. Does it have network effects as deep as iOS?

      • I think that's a good view on the prospects for Android, but what are your thoughts on Android as a strategy for Google? Will it make money for them?

        I know Eric Schmidt says they'll make a billion dollars incremental revenue from it, but some of the stuff you've highlighted would suggest this could just be a big cash trap for them, more benefiting the OEMs (who don't have to finance the SW development) and carriers (who can have the OEMs customize and lock it to their specifications).

      • asymco

        The billion dollar figure is income from all mobile efforts, most (if not all) of that is due to AdMob. Google spent $750 million and the income (not earnings) from that effort is being used to justify the purchase price. Andy Rubin has to pay salary for thousands of employees. Not sure we'll see profitability for some time.