• What’s Driving IoT?

    I’m often asked, What will drive the adoption of the Internet of Things?

    My answer is three very different industries with three different motivations:

    1) Self-funding business models driven by behavioral change
    Enchanted objects make data-gathering passive and data-display pervasive. This tends to either accelerate consumption behavior, as in pills or content, or reduce care costs, as in healthcare or the care of capital assets like cars and appliances.

    2) Connected hardware companies and telcos who sponsor and promote enchanted objects
    Telcos like AT&T, Verizon, Orange, and others measure their success with the KPI of average revenue per user (ARPU). Each new connected thing gives them the ability to increase this metric with new monthly service fees or bundled family plans.

    Consumer electronics makers like Samsung, Nokia, and Apple also benefit from enchanted objects because it represents a new product category that people will buy and upgrade in addition, and in parallel, to smartphones and tablets. Witness Samsung’s accession of SmartThings.

    Notably, neither the telcos nor classic consumer electronics makers participate in advertising revenue, which is growing the coffers of Google, Apple, and Facebook.

    3) Product companies craving differentiation
    Pity the furniture companies and makers of shoes, hats, kitchen appliances, faucets, lighting, jewelry, etc.. These categories compete purely on commoditized features like color, material, and style. If you are a watch-maker or woman’s handbag maker your styles are copied by your competitors before they arrive in stores because the network of manufactures and retail sales reps trade information.

    I predict these traditional inert product companies will start to aggressively use crowdfunding platforms like Kickstarter and Indiegogo to test (or copy) ideas for enchanted objects. And you probably won’t notice it. They will use covert names to shield their identity and risk to test new ideas and garner early market feedback (think Clarol’s covert Origins brand or Budweiser’s fake local craft brew RedDog).

    Google has the most to lose from Enchanted Objects
    Resistance to enchanted object adoption will be led by the those who benefit most from ad networks. Most enchanted objects play in the design space of color, sound, haptics, and shape-shifting materials. The ad units simply don’t exist for these media. Companies like Google and Facebook who increasingly rely on advertising revenue will find themselves without a stake in the growth of Enchanted Objects.

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  1. […] Schwarz: You wrote on your blog that Google and Facebook has the most to lose from Enchanted Objects. Why is […]