When is a refrigerator more like a cash register? These words may sound like the beginning of a children’s riddle, but as the proliferation of smart devices continues into the marketplace it becomes abundantly clear that for many foreseeing corporations these simple words accurately describe a tangible and continuous revenue strategy within the internet of things.
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Yes, the modern smart refrigerator still provides the same familiar conveniences — it still stores your eggs, milk, pizza leftovers and an assortment of condiments — but when those items begin to expire, there’s no longer an excuse to let them sit in the abyss of the fridge for days or weeks. You see, your fridge knows that they’re ready to be tossed into the trash and can then create a revamped grocery list on your behalf — this knowledge and proactive action graduates common household appliances into a whole new echelon of device intelligence.
This is our new world in the internet of things. The appliances and day-to-day electronics we engage with are becoming smarter, and at a rate never before imaginable. According to Strategy Analytics, more than 33 billion devices are expected to be connected by the year 2020, which is nearly three times the total number of connected devices in 2014. Connectivity to the cloud, combined with sensors and advances in deep learning are driving new levels of sophistication to everything around and even on us. And with that, a vibrant ecosystem is born. One that is giving rise to both consumer electronics manufacturers and developers across a variety of markets and industries looking for ways to capitalize on a treasure trove of new opportunity.
How big? Strategy Analytics is predicting that consumer spending on smart home systems alone will reach $130 billion globally.
And appliances are just the beginning. Virtually every market is taking advantage of our new connected reality — even virtual reality. It won’t be long before we see bleeding edge VR goggles becoming commonplace in our homes, manufacturing plants and even hospitals. Gaming, robotics, health and wellness — the possibilities are endless.
Expansion into this growing market not only provides potential for product extensibility and a new line up of connected devices, but also means a new opportunity to monetize through unique content and service delivery. Let’s revisit that smart refrigerator for a second.
The smart refrigerator isn’t just about selling more appliances. The smart refrigerator opens up new possibilities to drive consumer purchases of goods, in this case groceries and beverage items. Or even consider the case where the smart refrigerator offers a tailored plan for shedding a few pounds through a preferred weight and nutrition subscription. Just like we saw in the smartphone revolution, apps and services are a natural fit for new IoT platforms that will take consumer convenience to a new level while driving additional revenue opportunities for both the OEM and the developer. What’s unique this time around is the sheer mass of device form factors and market verticals where opportunities to drive monetization through new services exist.
The smart TV market has already proven this out with on-demand, over-the-top and other content services driving new revenue streams through shows, movies and additional subscription content.
And through a much better understanding of the user, services can be far more personalized and targeted than ever before. For instance, as more smart hubs enter the home providing a one-stop shop for content and information, there is a new avenue for targeted advertising that can be linked directly to a preferred service or an in-the-moment need.
You can imagine how your preferred big box retailor might remind you to replace your LED lights if it knows they will burn out soon — and they just happen to be 25% off when you buy a box of four. Or even better, your go-to online retailer offering up a special on your favorite specialty high-test coffee that you can’t find in stores. Combine all that goodness with a consumer loyalty program that can help retailors offer up specific offers related to inventory they need to move quickly and we end up with a variety of ways in which the ecosystem can drive alternative monetization.
The possibilities are endless.
But — and this is a big but — tapping into these revenue opportunities is only achieved by adoption, which is driven by the value the consumer derives from the device. Quite simply, all of these experiences and devices need to work and it needs to be effortless. Intelligent doesn’t always mean intuitive. Many of these “things” have small interfaces or no interface at all, so being able to engage a smart refrigerator needs to be a seamless part of your daily routine. It should deliver on the promise of technology to make life easier and more productive.
For many, voice and gesture are the most intuitive forms of communication. And as these technologies themselves become more intelligent — backed by natural language understanding, contextual understanding and reasoning — talking to your walls will ultimately become second nature. Or at least it should be.
To go one step further, this ecosystem of things becomes an ecosystem of incredibly unique devices that have one thing in common: to be differentiated. Whether they’re being designed for a specific enterprise market or for a very specific use case like home security, these things not only need to be able to listen, understand and respond, they need to do it in a way that maximizes the experience for the end user.
And when you begin to layer in other advancements such as voice biometrics, the experience can be further tailored when shared devices within the home know exactly who is using it and the content or access to serve up based on user-defined preferences.
Everything will be special in its own way, demanding a specialized approach to the interface. OEMs and developers need to be able to quickly and easily integrate voice capabilities into their devices, with a language that, well, speaks their language. The needs associated with a thoughtful and powerful dialog with your thermostat are very different than those for virtual reality goggles for industrial warehouses. There is no one-size-fits-all approach when it comes to the voice interface in the age of things. Manufacturers and developers that artfully map the custom speech experience to the intelligence of the device will drive adoption and usage, which then drives a virtuous cycle of new revenue opportunities.
If we take a look back at what is happening in the TV market, there are countless benefits for operators and providers that adopt voice search capabilities. By reducing the friction a user has in finding and discovering TV content, both operators and over-the-top providers have a greater chance of upselling content. In fact, we are seeing triple digit increases in users searching for content via voice on their TVs year-over-year, which not only helps the consumer have a better experience with their TV, but it simultaneously influences monetization opportunities for providers.
It’s important to note that manufacturers and developers may miss these unique revenue opportunities if they don’t have full end-to-end control over the experience they are delivering — or the data. Data is gold — perhaps even platinum — in this age of the cloud, where we can learn more about how people are taking in and leveraging content and information to make those experiences even more fulfilling and personalized.
Truth is, many of the go-to developer platforms don’t give you the ability to craft a custom speech experience from the ground up or provide open access to your data, or even just a glimpse into it. As a result, OEMs and developers can be left blind — and blindsided — by important trends and information that make all the difference in a competitive marketplace.
Developers need access to platforms that not only provide incredibly accurate and intuitive technology, but platforms that also drive a more open and democratized ecosystem, giving them the insight and data that they need to succeed in a world of cloud-based “things” overload. We’ve all seen how the alternative monetization plays out in the smartphone market, and OEMs and developers shouldn’t forfeit their share of the pot as the world transitions to IoT.
The internet of things is very real and growing — fast. It’s possible for device makers and developers to drive substantial revenue beyond just the point-of-sale of the device, and for developers to monetize their offerings on a much more diverse set of device platforms. This window of opportunity to seize additional value is made possible by open platforms and artfully crafted voice experiences that make these new devices usable and delightful for the consumer. There’s an opportunity to democratize new value creation for the masses, and not restrict value creation to the few. And, as a result, turn the promise of a smarter and more intelligent world into an ecosystem that drives growth in a number of ways.
All IoT Agenda network contributors are responsible for the content and accuracy of their posts. Opinions are of the writers and do not necessarily convey the thoughts of IoT Agenda.