Global design firm Frog Design Inc. has moved its main office and is working with majority owner Flextronics International Ltd. on integration of a few projects.
Singapore-based Flextronics made an equity investment in Frog in August 2004 and operates Frog as a subsidiary. Frog relocated its principal operations to Palo Alto, Calif., from Sunnyvale, Calif., in early July 2005.
>From the start of their relationship, Flextronics acknowledged the potential for conflict between its customers for electronics manufacturing services and Frog's customers. To deal with potential problems, Flextronics created internal procedures that separate departmental access in competitive situations.
``We have a couple of customers who compete with Flex customers,'' Patricia Roller, Frog co-chief executive officer, said in a telephone interview. ``We collaborate on generic knowledge and protect customer intellectual property, and we will continue to operate that way.''
Frog and Flextronics are in the early stages of integrating some programs. ``Flex and Frog are going after the automotive industry in particular,'' she said, noting the benefits of collaboration and Flextronics' unusual flexibility for a large global organization. Flextronics reported profit of $339.9 million on sales of $15.9 billion for the fiscal year ended March 31.
Frog is gaining experience in customization, particularly in recognizing the increasing importance of environmental and recycling issues, especially in Europe. ``There, we rely on Flex expertise,'' attending Flex seminars and leveraging Flex wisdom on the critical subjects, Roller said.
Burbank, Calif.-based Walt Disney Co. used Frog's design knowledge in the launch of Disney's consumer electronics business, including low-cost branded television sets, DVD players, karaoke equipment and cordless telephones.
Nextel Communications Inc. of Reston, Va., a provider of wireless communications services, wanted help in customizing its branded handsets with textures and materials.
``We don't change the product entirely,'' but may make modifications in the plastic housing, perhaps with the youth audience in mind, Roller said. ``We can take a boring phone and make it cool with textures and colors.''
For Nextel, Frog made user interface and software improvements.
At Frog, usually a five-person team is assigned to work on a specific client situation. About 70 percent of Frog's 200 employees deal with user interface issues as design analysts, stylists, information architects, technologists and researchers. Product designers constitute the remaining 30 percent.
The Frog-Flextronics relationship is very different from Flextronics' previous experience integrating design and manufacturing firm Palo Alto Products International Pte. Ltd., which it acquired in 2000. Palo Alto Products became the center of Flextronics' design functions.
``Palo Alto almost became too integrated'' with its range of design, toolmaking and manufacturing functions, Roller said. She said the Frog team has learned from Flextronics' Palo Alto experience and made adjustments.
Design industry guru Craig Vogel said the linking of Flextronics' technology and Frog's design resources continues a global merger trend, and it raises questions. Product suppliers, including many in Singapore and Hong Kong, are breaking into original design manufacturing through acquisitions or in-house upgrades.
Vogel, director of the center for design research and innovation at the University of Cincinnati [Ohio], said he is unsure about the comfort of a marriage between Flextronics and Frog and wonders whether Flextronics can use the design firm effectively.
``It is a big challenge for Flex,'' Vogel said. ``Are leadership levels willing to respond?''
Globally, Flextronics employs about 92,000, including more than 6,000 design engineers. The publicly traded company has administrative offices in San Jose, Calif.
Other Frog operations are located in San Francisco; New York; Austin, Texas; Milan, Italy; and Herrenberg, Germany.