Executive Edition Podcast: Steve Gosk from Fischer Connectors on the future of connectivity

[A lightly edited transcript follows …]

DW: I’m Mary Gannon, senior editor with Design World. Welcome to Design World Executive Edition, where we speak with the leaders of manufacturers, OEMs and other engineering companies. Today I’m joined by Steve Gosk, president and CEO of Fischer Connectors. Thanks for being here today, Steve.

SG: Thank you, Mary, for having me.

DW: Great. Let’s just get into it. Want to talk you a little bit about Fischer’s business and your technologies. I know that you have two quite different parts of your business, selling connectors and the cable business, which is more of a value-add service. Can you talk about those two halves and tell us what the percentage split is between the two of them?

SG: Sure, Fischer, of course, has 60 years plus in history of developing and manufacturing connector product, which is part of what we do here with the U.S. subsidiary. The other piece of our business is doing value-add cable assemblies and we are seeing a trend in growth of our cable assembly business, which really for me is really indicative of us being customer-centric as an organization and listening to our customers and seeing more and more of our customers that we serve, looking for that value-add solution and so we’re trending towards about a 50/50 split in our business and we see it holding probably in that relationship. But it’s also a result of continuing to improve our capabilities in a design experience in that space and really focusing on what our core [inaudible 00:02:36] in helping our customers do the same for their business.

DW: Great. So, would you say that the cable assembly has kind of been growing a lot for you in recent years? Is that kind of the path you continue to see or do you think it’s going to just stay at that 50/50 equal?

SGk: I think for our projections, we’ll see it staying at about half of our business mix moving forward.

DW: Great. And as we just mentioned, connectors have always been sort of your main business. You just had a big launch with the Freedom Connector. Can you tell us about the genesis of that product and how it changes the market for you guys?

SG: Sure. I think first and foremost, it’s really the first product you’ve seen from Fischer that’s not a traditional push-pull connector. The Freedom Connector is going to be part of a new series of products for us and it’s really got its genesis out of the military market and the soldier wearable need, but we see this market for us and this connector for us going into a variety of different spaces as we add to the family. So, for example, we’ll be launching in early next year, a smaller version with four contacts. We’re looking at things like plastic versions and such for the medical market, all of which, take advantage of the 360-degree mating, IP-68 seal requirements, down to -20 meters for 24 hours and also, it’s low profile. So, for me, if I look into the future especially with the internet of things and wearables and sensors and such, this could be used in a lot of different spaces beyond military, inclusive of medical or even monitoring production personnel and in industrial or civil engineering type of environment.

DW: Great, and speaking of the military market, I know that you just came from the AUSA Show and military accounts for about 38% of your business, I believe, that you said in previous years. What’s your outlook for that market going forward?

SG: We really watch this very closely as it is a major portion of our business and just to give you some perspective, military makes up an estimated 60% of the rugged circular marketing in North America, so whether there’s a lot of spending going on or not, it’ll always be a big part of what we do and so with that, we watch it pretty closely. We use some third-party resources to help us understand the market, the market trends and when we could expect even a downturn and everything we’re seeing right now would surely indicate that we’re looking at a four to five year trend of very positive market conditions and so we see that as a very good thing for our business and a lot of the programs that we’re active with are really modernization type programs that really focus on some of the key spend areas for the military such as lethality of the soldier, communication, targeting, sight, vision systems and such. So, we’re trying to focus best we can on those customers serving those types of applications that’s going to represent where much of the spending is going to take place.

DW: Perfect. And I know that military and medical is another big market for you. What about other smaller markets that you’re trying to grow in? What do you think that you guys are going be focusing most actively on for the future years?

SG: As I said, military will always be an important market, but we’re also extremely active in medical. We’re one of a handful or so of suppliers who do silicone cable assemblies for the medical space and that continues to be an evolving and developing piece of our business here. The other segments that are important are such as instrumentation, which tends to have a little stronger presence for Fischer on a global basis, but one that has opportunity for us here in the U.S. and then, finally, there’s some emerging segment or customers that you just wouldn’t traditionally think of. You know, people like Apple or Google or even Facebook are now active customers with products such as driverless vehicles or surveillance and vision systems or even bringing intranet connectivity to third world countries, so there’s some interesting new opportunities developing that, traditionally, haven’t been there.

DW: That’s pretty cool and sort of that high-end connector, I’m sure too, with very reliable issues with things like driverless cars and the internet. I know that Fischer holds about 3-5% of the connector market, but again, it’s that sort of that high end interconnect designs. Tell us a little bit about your strategy there.

SG: You know, if you look at estimates on the size of the global connector market, it’s now exceeding $50 billion, so the overall market is huge, but that encompasses a lot of different types of connectivity and the connector to products. Clearly, we’re playing in a very high-end niche of the market. We estimate that we’re playing in somewhere about a 3-5% market niche, which is the high-end piece of the market requiring a ruggedness, some high ceiling capabilities, high intermateability and such, that Fischer is known for. We see a lot of opportunity to continue to grow in that space, based on our current estimated market share and so we’re going to continue to look for product solutions, new product development that serves the customers and allows us to continue to expand our business.

And also, really starting to trend to be connectivity solutions provider. If you look at some of our branding, we’re really trying to capture that in a sense of re-imagining connectivity that will shape the future for our customers and coming up with products and approaches that will allow us to be and continue to be more valuable of a resource to the customers as they look to what they need for their business in that same space.

DW: Great, so as that connectivity provider, you’re going to be kind of becoming more a solutions provider versus just sort of a product provider?

SG: Correct, and I don’t think that trends so different than other markets and other spaces that are out there. Our customers are really focusing on what they do best and their competencies and they’ll look for companies who have other capabilities to come in and support them in areas that will help them continue to grow their business and meet their product requirements for the future. So, the connectivity solution could be a lot of different things, but naturally, ideally for us it’s an area that we have experience and we can leverage the experience we have, the capabilities we have to help that customer solve their problem.

DW: Sounds like there’s a lot of interesting and exciting things on the horizon for you guys. I know that you’re going to have some more developments with the Freedom Series. Anything else that we should be looking for from Fischer Connectors in the next year or so?

SG: You know, if you look at in the last four or so years, we’ve had some major product launches with the UltiMate Series, our fiber product offering, the MiniMax and now the Freedom Series. We’re going to continue to build out those product families, in particular, and some of those families, for example, such as the MiniMax, we’re looking to use the overall product and develop it for data transmission or power applications that our customers now are looking for, the whole swath concept to be applied in pushing more data and information, video, all through the same connector, so at speeds of whatever it happens to be, the latest transmission speeds going forward and that really takes us from a mechanical device into a lot more of an electronic device to allow us to match up what those customers are looking for, so really in the near term, look for us to continue to build out those new product families into applications that our customers are demanding.

DW: Wonderful. We’ll definitely have to stay tuned and see what exciting things are on the horizon for you guys. Thank you for being here with me today, Steve, and for giving our listeners a deeper look at what Fischer Connectors sees as the key to the future of connectivity.

SG: Excellent, thank you for your time today.

DW: Thank you and where can our listeners go to learn more about Fischer Connectors and the Freedom Series?

SG: You can certainly visit our website, which is www.fischerconnectors.com.