Nanotechnology's Impact on Products: Cancer Treatment Gets Reinvented, Automobiles Get Incrementally Improved

Case studies in Lux Research report quantify who will capture value from

nanotech in consumer products

Mar 29, 2005, 00:00 ET from Lux Research

    NEW YORK, March 29 /PRNewswire/ -- Who will win and lose as nanotechnology
 pervades consumer goods? The answer will differ greatly by industry and
 product category, according to a new report from Lux Research entitled "How
 Nanotechnology Adds Value to Products." Nanotech could slash the cost of
 breast cancer treatment by 39% and add an average of seven years' to patients
 lives, reinventing the field -- but in another sector like automotive,
 nanotech innovations will add a series of small, incremental innovations from
 which component suppliers benefit the most.
     "First-generation consumer products incorporating nanotechnology are
 already on the market. They show price premiums of 11%, on average, over
 conventional products. For example, Easton Sports' Synergy SL hockey stick is
 built from a carbon nanotube composite, and Wyeth's Rapamune immunosuppressant
 tablets are milled into nanocrystalline grains," said Matthew Nordan, Vice
 President of Research at Lux Research. "But these products form a poor guide
 to the future. Second-generation nano-enabled products will differ by tapping
 many nanotechnology innovations instead of just one, employing active
 nanostructures, and requiring new manufacturing processes to exploit."
     To calculate the value that will be created and destroyed by
 nanotechnology in second-generation products, Lux Research built detailed,
 quantitative case studies of 1) a high-volume consumer truck, 2) a high-end 3G
 mobile phone, and 3) the course of treatment for breast cancer. For each, Lux
 Research identified a shortlist of nanotech innovations likely to have the
 greatest impact in a five- to ten-year time frame and quantified how much
 value would be created and destroyed if the innovations were deployed in
 volume -- as well as who would capture the net value created.
     Based on the case studies, the report finds that:
     * Nanotech's impact on a consumer truck is broad but shallow, with many
       minor advances. If six emerging nanotech innovations were all applied in
       one model year of a high-volume truck like the Ford F-Series, tier-one
       suppliers to the auto manufacturer would win the most with $493 million
       in incremental revenue for that model year. Consumers would rank next
       with $327 million in cost savings over five years of use, mostly from
       better fuel economy, as well as soft benefits in performance and safety.
       The truck manufacturer itself would follow with a net $248 million in
       cost savings and boosted resale value, plus points of differentiation
       against competitors. But incumbent suppliers of materials like talc-
       filled composites and microparticulate platinum group catalysts would
       lose $297 million in combined sales displaced by nanoscale alternatives.
     * The mobile phone case is narrower but deeper, where nanotech will
       sustain existing price/performance curves. The biggest winner from
       nanotech in one model of a high-end 3G mobile phone would be the
       manufacturer, which could use five emerging nanotech innovations to gain
       crucial market share and keep giving consumers more for their money
       every year. New suppliers would earn $355 million from nano-enabled
       components like OLEDs and single-chip memory solutions, at the expense
       of $251 million in lost sales by incumbent suppliers.
     * Breast cancer treatment sees a revolutionary, narrow-but-deep impact
       from nanotech. If four emerging nanotechnology innovations were
       universally applied to breast cancer treatment, patients would win the
       biggest with seven years of life added on average -- a gain impossible
       to quantify in dollars. Fifteen-year treatment costs for one year's
       worth of diagnosed patients would drop by $4 billion -- a savings of 39%
       -- and entirely new franchises would be created in new nanoscale
       screening tools that replace mammography, nano-enabled MRI contrast
       agents that replace biopsies, nanoparticulate ablation procedures that
       replace lumpectomy and mastectomy, and nano-reformulations of existing
       chemotherapy agents. Incumbent suppliers would lose: for example, entire
       classes of chemotherapy agents worth billions of dollars in annual
       revenue would be displaced.
     "The rise of nanotechnology in consumer products will spur action from
 start-ups and large corporations alike," Nordan commented.  "Start-ups should
 pay attention to their partners' and customers' soft branding issues as well
 as hard business case concerns: Although few consumers are likely to use a
 nano-enabled solar cell recharger packaged with their mobile phone, Konarka
 could sell millions of such rechargers to Nokia anyway if they provided a
 means to differentiate against competitors' phones. Corporations should
 consider 'blocking acquisitions' that allow them to gate the introduction of
 nanotech enablers rather than letting competitors set the pace, in the same
 way that they pursue 'blocking patents' in nanotech today."
     The report's case studies identify 43 nanotech innovations across the
 three product categories studied, and quantify the impact of 15 key
 innovations in terms of net value captured by suppliers, manufacturers,
 customers, and other parties in the products' value chains. The report is
 available immediately to clients of Lux Research's Nanotechnology Strategies
 advisory service. Clients can also access the Lux Research team to drill down
 on specific aspects of the cases, as well as to apply the same case study
 process to other product categories. For information on how to become a
 client, contact Rob Burns, Vice President of Sales, at (646) 723-0708.
     About Lux Research:
     Lux Research is the world's premier research and advisory firm focusing on
 the business and economic impact of nanotechnology and related emerging
 technologies. Lux Research provides continuous advisory services, customized
 consulting, and reference studies to corporations, start-ups, financial
 institutions, and public sector organizations. Our founders and our research
 staff are the most widely recognized nanotechnology visionaries throughout the
 world. Visit for more information.

SOURCE Lux Research