Many new products are being introduced where the initial purchase price is below cost, with a plan to recover the loss on aftermarket purchases of accessories and add-ons. This business model has been used in the printer and printer cartridge market for years and is now expanding into home entertainment consoles and other devices. It allows products to quickly capture a large market share and grow revenues based on the aftermarket sales.
A risk in this business model is the tamper-resistance of the sales platform. Once a vulnerability in the platform is exposed in the mechanism to validate aftermarket products, third-parties quickly appear to capitalize on the aftermarket market opportunities. Although patent protection provides some relief, aftermarket suppliers can often find ways around copyrights and patents. This puts the aftermarket revenue at risk for the company that introduced the original product and creates the need for a more tamper-resistant platform.
Any potential solution or range of solutions must carefully balance production unit cost parameters against level of difficulty of cloning the accessory. Often, achieving “perfect security” is economically infeasible – the optimal solution must provide “enough” security at an acceptable incremental unit manufacturing cost.
Using the Certicom Security Architecture™, vendors can embed public key technology to provide a cost-effective, tamper-resistant platform which can still be reliably upgraded. By using Certicom KeyInject™ hardware-enabled signatures can be added as anti-cloning safe guards. This makes a product more tamper-resistant and reduces the risk of third-parties stealing revenue stream.
Certicom has significant experience developing anti-cloning and conditional access systems.
Certicom’s industry leading technology offers an OEM or device manufacturer a means to significantly increase revenue by enabling them to shut out aftermarket companies or legitimately license them.