A move toward hardware development is taking Silicon Valley companies back to their roots. A milling machine fashions a prototype. Noah Berger for The New York Times

In recent years, Silicon Valley seems to have forgotten about silicon. It's been about dot-coms, Web advertising, social networking and apps for smartphones.

But there are signs here that hardware is becoming the new software.

It is an expansion of a trend that began a few years ago with the Flip videophone, and has recently accelerated with Nest, the smart thermostat; Lytro, a camera that refocuses a photo after it is taken; and the Pebble smartwatch, a wristwatch that can interact with a smartphone.

Although the hardware is not manufactured in Silicon Valley, it is being conceived, designed, prototyped and financed here.

What has changed? Each of those steps is speeding up, which cuts the costs and lowers the risks of developing new things.

It's not that software is any less important in Silicon Valley. But hardware is now tightly integrated with software. Apple has taught product designers that an electronic device isn't much without specially designed software that makes it a joy to use.

Any designer now has the ability to quickly experiment with new product designs using low-cost 3-D printers. These printers can churn out objects to make prototypes quickly - a fork, wall hooks, mugs, a luggage clasp. Products can be made quickly in contract assembly plants overseas, usually in China.

"Products like the iPhone have driven down the cost of components," said Sean O'Sullivan, a venture capitalist. "You can now easily make connected devices that transform lives in the way we have only been able to do with software before."

To prove his point, Mr. O'Sullivan recently took teams from nine small start-up companies to Shenzhen, China, for 111 days in which each group developed and began manufacturing new products. He calls his investment firm Haxlr8r (pronounced hack-CEL-erator), and in June the first group of hardware products was unveiled.

The companies included Shaka, which makes a device for measuring wind for sailboard and kite surfers, and Kindara, maker of an iPhone accessory to help women determine when they are ovulating. There is also Bilibot, a project to build an inexpensive open-source robot.

Tony Fadell, a former Apple executive who led the design teams on the iPod and iPhone, recently started a company called Nest, which makes a beautifully designed smart thermostat for the home. Hugo Fiennes, the Apple hardware manager for the first four iPhones, started a company called Electric Imp, which plans to connect everyday objects, like wall outlets and household appliances, to the Internet.

Even distribution has been simplified by technology. Online marketplaces like Etsy, Amazon and Google's Marketplace allow people to set up shop on any street corner of the Web and begin hawking their latest hardware ideas.

The ease of making hardware prototypes had contributed to the rise of a new genre of financing with Kickstarter, a Web site that has raised impressive sums for hardware start-ups. Entrepreneurs pitch their idea on the site and ask for donations - often promising the product, or a promotional T-shirt, for the cash.

Ouya, an open-source game console for the TV built using Google Android, just raised more than $8 million through Kickstarter. Pebble, the smartwatch that connects to smartphones, raised more than $10 million after asking for just $100,000.

The collapsing cost of hardware can be seen in its revival of a hobbyist ethos in the so-called Maker subculture. That ethos is thriving on the easy availability of low-cost computers and sensors.

One of the best examples of that movement is a full-blown $25 computer system the size of a credit card. Designed by a small team led by Eben Upton, a chip designer at Broadcom, the computer is known as Raspberry Pi, and the Valley's hobbyists and start-up fans have seized on it as a breakthrough in innovation. So far, 100,000 computers have been sold, and the Raspberry Pi Foundation is making 4,000 daily - enough to reach almost 1.5 million dreamers in a year.

When Raspberry Pi is almost as cheap as a raspberry pie, the impact on future hardware development will be profound. "People are using this as a catalyst to get new designs to the market more quickly," said Kevin Yapp, chief of marketing and strategy for Element 14, an international online community for engineers backing the project.

Stewart Brand said that information like software "wants to be free," said Mr. O'Sullivan, the venture capitalist, referring to the editor of the Whole Earth Catalog. "Now hardware is almost as cheap as software."

The New York Times

(China Daily 09/23/2012 page11)