IoT Megatrends 2016

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IoT Megatrends 2016 | © 2015 VisionMobile

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StijnSchuermans

Senior Business Analyst

Michael Vakulenko

Strategy Director

AndreasConstantinou

Director and Founder

Stijn focuses on understanding how technology becomes value-creating innovation, how business models affect market dynamics, and the consequences of this for corporate strategy. He is the lead Internet of Things researcher in the VisionMobile team since 2012. Stijn holds an engineering master degree and an MBA. He has over 10 years experience as an engineer, product manager, strategist and business analyst.

You can reach Stijn at:[email protected]@stijnschuermans

Michael has over 18 years experience in mobile and telecom starting from working on first experimental 3G systems in Qualcomm. Later on Michael was part of several startups developing products in the areas of wireless, enterprise networking and mobile apps. At VisionMobile Michael works at the cross section of business models, economics and technology where he leads strategy practice for software-centric business models in mobile, Internet of Things and Connected Car.

You can reach Michael at:[email protected]@mvakulenko

As Director and Founder, Andreas oversees the growth and strategy at VisionMobile. He has been working on the mobile industry since 2000, helping take the very first smartphones to market. Since then he’s worked with the top technology brands, from Amazon to Samsung to help them understand developer trends and the future of software. In his academic life, Andreas is an Adjunct Professor at Lund University, Sweden, where he teaches Internet Business Models.

You can reach Andreas at:[email protected]@andreascon

About the authors


In this report

5

Developers are the new baseline

Battle of the Smart Home Hubs

The 4 frontiers of wearable platforms

From Connected Car to software-defined transportation

Consumer and Enterprise technology converge

The hottest business models in IoT

© 2015 Vision Mobile

Developers are the new baselineIf you’re not into developers, you’re not doing it right


Developers flood into the Internet of Things fast

7

5M

10M

Already 4.5 million individuals active as IoT developers in 2015


Key players in every market build their strategy around developers

8

Smart Home Smartwatches Industrial IoT

Connected Car Drones Augmented & Virtual Reality


Developers extend your business model

9

Innovators Customers Extenders Distributors

Developers are …

Developers build new value with software as

employees in your company

Developers are customers of tools, libraries, and

platforms

3rd party developers extend your business into

new use cases, and are partners in new alliances

3rd party developers are distributors of your

products, taking it to new users and markets

Replenishment Service

Amazon Alexa Voice Service

valuecreation

value capture

valuedelivery

valuecreation

Developers extend your business model:


But developer interest shouldn’t be taken for granted!Hype alone could not sustain developer involvement in Wearables

10

28%

21%


Every company should master developer ecosystem skills

11

platform technology people rules for

interaction+ +

“Managing developer ecosystems is a human art.” Todd Luwak*

individuals & companiesusers & developers

API

cloud, APIs, apps,devices, OS, …

app curation, governance, …

(*) http://allthingsd.com/20131021/managing-platforms-is-a-human-art/


Understand developers by looking at their goals and motivations

12


The developer segment mix is an indicator of market maturityIndustrial IoT is almost as mature as mobile; Smart Home trails

Increasing maturity

13

mobile

IoT


IoT markets are not independent: developers cross boundaries

Smart Home

Retail

Industrial IoTWearables

Smart City

Medical

Connected Car

The link is stronger when developers are more likely to target both verticals.

Smart Home, Connected Car and Smart City form a cluster. Developers active in

one area are likely to be active in the others as well.

Wearables is one of the most stand-alone IoT verticals.

Smart City is disconnected from Retail and Medical.

There is a big overlap between IoT

developers active in Retail and Medical.

14

IoT Megatrends 2016 | © 2015 VisionMobile15

Developers are a driving force in every IoT industry

and a source of competitive advantage

Every IoT company should master the human art

of managing developer ecosystems

take-aways

read more

IoT Developer and Platform Landscape 2015

IoT Developer Population 2015 - 2020

http://vmob.me/iotmegatrends2016IoT15


Battle of the Smart Home hubs


Smart Home Hubs: everyone wants to be at the center of your home

17


Smart Home draws the most attention from developers, too

18

number of individual IoT developers active in each vertical


How do modern Smart Home hubs compete?

(A)New touchpoints

(B)New interaction

models

(C)Developers


(A) 4 new touchpoints: what the user interacts with every day

20

Voice control Next-gen remote controls

Apps Messaging

Microsoft Cortana

Apple SiriLogitech Harmony

WeChat Facebook Mon your watch, phone, tablet, desktop, TV


Who owns the customer relationship? Who will users be loyal too? In which interface will users invest time to learn?

21

device makers?

hubmakers?

touchpoints?

user


(B) Interaction models: what does a ‘Smart Home app’ look like?

22

Companion app Scenario or rule Conversation

Rules set by artificial intelligence

Microsoft Cortana

Apple Siri

with voice or chat

Rules set by the user


Artificial intelligence will play a key role in Smart Home interaction

23

Companion app Scenario or rule Conversation

Rules set by artificial intelligence

Microsoft Cortana

Apple Siri

with voice or chat

Rules set by the user

artificial intelligence is the key value proposition


Will developers go extinct?And what are the implications for future Smart Home platforms?

24

Smartphone

Smart Home

app developers create functionality

power users set rules

everyone is a developer

app developers program scenarios

developers assist users

artificial intelligence discovers rules

developers are nearly obsolete?


(C) Extendibility by 3rd parties is still key to success

25

Platforms will beat Products every time! *

Amazon Alexa Skills Kit

extend with appsand scenarios

extend with scenarios

extend with voice-addressable

services

(*) Marschall Van Alstyne, professor, MIT


Key players count on developers to drive value creation

26

App & rule platforms Conversation platforms

Alexa by

Apple HomeKit


Platforms, not products, will determine who wins the

customer relationship. Conversational platforms (voice,

chat) are coming up strong.

The rise of artificial intelligence fundamentally challenges

the central role of developers as creators of use cases, but

developers remain key in platform strategies, if not for

apps, then for services.

take-aways

read more The Smart Home Landscape 2015

Developer and platform outlook for the Smart Home

Published August 2015

http://vmob.me/iotmegatrends2016SmartHome15


The 4 frontiers of wearable platforms


4 innovation frontiers in wearable platforms

29

1

2

3

4

Wearables move from consumer electronics devices to being unobtrusively embedded in clothing

In smartwatches, Android Wear is under pressure from new platform challengers

Augmented and virtual reality are the next big wearable app platform opportunity

Data app platforms are emerging; developers haven’t caught on yet


The disappearing act of wearable technology Wearables move from high-tech devices to unobtrusive clothing

30

Rihanna's Go-To Designer Made a Dress That Works as a Credit Card

Ralph Lauren's Futuristic Fashion:

The PoloTech Smart Shirt

ShiftWear: sneakers with e-ink screen and “Walk to Charge” tech

1

when it’s invisible but valuable, technology becomes relevant for traditional fashion companies


Enabling technologies for next-gen smart clothing

31

Printable electronicsand batteries

Woven electronicsand batteries

Energy harvesting for self-powered wearables via thermopiles (shirt) or kinetic energy (shoes)

1


New opportunities for fashion brands : digital identity is key

32 Source: IoT report series: The Wearables Landscape 2015

expanded value proposition

• personalized workout recommendations• personalized encouragement• engaging community

from one-off saleto lasting customer relationship

• continuous brand exposure via app• lock-in through stored value (exercise history)• re-engage and market directly to consumer

1

Digital identity enables a powerful connection between brand and user


Android Wear is under pressure in smartwatch platforms

Chinese internet companies build their own Android derivatives for wearables

Victims of the Android smartphone strategy build direct challenger platforms based on Tizen or webOS

33

2


The next big wave of wearable app platforms: AR/VR

Valve SteamVR

Sulon Cortex

StarVR

34

Playstation VR

3


AR/VR developer tools are emerging, too

35

tools and script libraries for VR app development,

motion tracking technology

“WorldViz virtual reality empowers businesses with new visualization

techniques, developers with fresh creative potential, and researchers with tools that

accelerate scientific discovery.”

Structure Sensor and SDK: real-time 3D vision on mobile

devices

“Need precise 6-DoF positional tracking? Volumetric

reconstruction? Real world occlusion? Our APIs have you

covered. ”

Cloud-based creation and hosting of high-fidelity 3D

models

“Our Models. Your Apps. Leverage the world’s first end-to-end

platform for creating immersive media.”

3


Data-first apps and platforms are gaining momentum

36

Apple ResearchKit

clinical researchwith smartphones & wearables

early apps address autism, epilepsy, moles, microbiome, environmental

influences, neurocognitive disorders, liver disease, asthma,

cardiomyopathy, and more

100,000 sign-ups inMarch to October 2015

Humanyze

workplace people analyticswith sensorized ID badges

capture tone of voice, when and how quickly people speak, where

people are when they interact face-to-face, and more

correlate with other forms of communication (email, phone) and

key performance indicators

Oscar

health insurancewith data from wearables

hired 45 engineers and built better tools for matching patients with physicians, gives customers free

fitness-tracking devices and access to a free unlimited telemedicine

service

40,000+ sign-ups in 2 US states in 2 years

4


Data-centric solutions are more lucrative than devices or apps

37 Source: VisionMobile Wearables Landscape 2015

Probability of earning more than a given amount per month in revenues

(higher is richer)

4

% o

f wea

rabl

e dev

elop

ers

inte

rest

ed in

rev

enue

| n

=506


… but few developers have gone the data route so far

38 Source: VisionMobile Wearables Landscape 2015 | % of IoT developers | n=2,360

4


Innovation in wearables is in full swing.

Soon …

… brands will compete on digital identity

… watches and AR/VR will compete on who has most apps

… the most successful developers will build on top of data

take-aways

read more The Wearables Landscape 2015

Developer outlook and platform leaderboard for Wearables

Published October 2015

http://vmob.me/iotmegatrends2016Wearables15


From connected car to software-defined transportation


DATA DONGLE

The focus in car app development is shifting

2012 2014 2016

41


Focus shifts from control over dashboard to control over data

We need to control access to [vehicle] data.

We want to keep control of the HMI, the UI, the whole safety aspect, the certification of the app in terms of the regulations of the different countries.

Steffen Neumann Mercedes-Benz, app portfolio manager

42

“

Don Butler Ford, executive director of

connected vehicle and services“

Jan2014

Jul 2015


With car data, developers are once again the key to success

43

Selected automotive developer programs in 2016


Software will define the future of transportationDashboard controls and engine data are just the beginning…

44

electrical cars are less complex, allow entrance of CE companies

machine learning systems based on big data from car sensors

where to drive to get from point A to point B, given road conditions

deciding in real-time where every car needs to go to meet demand

connecting car makers, operators, app & service providers, and users

from ‘taxi services’ to thousands of uses for autonomous transportationservices & apps

transportationplatform

fleet routing

navigation

autonomous driving

car hardware old and new car makers

Who’s playing?

softw

are

The future transportation value stack


Car makers face great challenges in this new era

45

electrical cars are less complex, allow entrance of CE companies

machine learning systems based on big data from car sensors

where to drive to get from point A to point B, given road conditions

deciding in real-time where every car needs to go to meet demand

connecting car makers, operators, service providers, and users

from ‘taxi services’ to thousands of uses for autonomous transportationservices & apps

transportationplatform

fleet routing

navigation

autonomous driving

car hardware old and new car makers

softw

are

Car makers lack access to software and data expertise, including artificial

intelligence, data science, and developer ecosystems

Car makers and their suppliers lack access to sufficient autopilot training data

Google: 48 cars | 1.2M miles driven

Tesla: 100,000 cars | 1.5M miles per day

Car makers & suppliers:limited data from internal testing

Consumer electronics companies have advantages in supply chain

and key technologies (e.g. batteries)


Will car makers miss automotive computing just like Microsoft missed mobile?

46

Right now we're selling millions and millions and millions of phones a year, Apple is selling zero phones a year. In six months, they'll have the most expensive phone by far ever in the marketplace. ... Let's see how the competition goes.

Steve BallmerCEO Microsoft, 2007

“There is absolutely no reason to assume that Apple is going to be financially successful in the electric car business. Electric cars are generally money losers.

Bob Lutz former vice chairman GM, 2015

“ We’re in the car business today, and they [Google] are not.

Mark Reuss, Product Development Chief GM, 2015

“thennow


The innovation focus in Connected Cars is shifting from the

dashboard to vehicle data, and in the future to data-driven

transportation platforms.

Car makers struggle to keep control over and to gain access

to the necessary supply chain, expertise, and data to be

leaders in this evolution.

take-aways

read more

Apps for Connected Cars?Your Mileage May Vary

http://www.visionmobile.com/blog/2015/11/self-driving-cars-are-about-platforms-not-about-cars/

BLOG

http://vmob.me/iotmegatrends2016car

http://vmob.me/iotmegatrends2016sdpblogpost


Consumer and enterprise technology converge


Today Smart Home, tomorrow Smart Office

49

Smart Home, not building automation, will be the future technology foundation for office environments

Why? consumer markets offer much faster product evolution and validation with customers

Smart Hometoday

Smart Office tomorrow

Smart Lock Smart Lighting Smart TV Smart Thermostat

Access control

Lighting control

Meeting room equipment

Climate control


The power of consumer-grade convenience

50

IBM and Yanzi sensorized an entire office building in under 4 hourstemperature sensors, smart plugs,motion sensors in rooms, on chairs, and on other objects

Consumer-grade ease of installation coupled with enterprise-grade security

http://www.ibmbigdatahub.com/video/creating-connected-building-under-4-hours


Wearables in the workplace: same technology, different use cases

Source: IoT report series: The Wearables Landscape 201551

Phase 1new tech, old solution

Phase 2wearable-first

Phase 3data-first

activity trackersfor corp. health plans

“shrunken smartphone”

display company data,BYOW

hands-free data logging, assisted reality, safety

people analytics


Industrial IoT: clash of technologies and engineering cultures

52

Jeff ImmeltCEO General Electric

If you went to bed last night as an industrial company, you’re going to wake up this morning as a software and analytics company.

“

industrial technology

data technologyfrom social media,

e-commerce, search

Source: GE Minds+Machines conference, 2014


Clash of cultures: consumer and industrial tech converge

The industrial Internet is the second wave of the internet revolution. A revolution which has already transformed the consumer environment is now beginning to spread to the industrial environment, thanks to a rapid decline in the cost of sensors and in the cost of data storage and computing.

Marco AnnunziataGE Chief Economist

Source: https://www.youtube.com/PxvKbt8pByA | Davos World Economic Forum, Jan 2015

“

Angela MerkelGerman Chancellor

We must deal quickly with the fusion of the online world and the world of industrial production. In Germany, we call it Industrie 4.0. Because otherwise, those who are the leaders in the digital domain will take the lead in industrial production. We enter this race with great confidence. But it's a race we have not yet won.

“53


Consumer and enterprise technology are increasingly converging in most industries.

Consumer not enterprise technology will be the foundation for the converged future.

Developers will be increasingly mobile between consumer and enterprise markets.

take-aways

read more

Smart HomeLandscape 2015

Wearables Landscape 2015

Industrial IoTLandscape 2015

http://vmob.me/iotmegatrends2016%CE%99%CE%99%CE%BF%CE%A415

http://vmob.me/iotmegatrends2016SmartHome15

http://vmob.me/iotmegatrends2016Wearables15


The hottest business models in IoT


Value quadrants: mapping business model evolution

56

services

tangible products

revenue at time of sale post-sales revenue

traditional product sales

when money is earned

with what money is earned


Value quadrants: some examples

57

services

tangible products


consumables (razer and blade model)

sell services on a monthly contract

traditional product sales

work on commission


Business models shift in Industrial IoT

58

services

tangible products


sales of industrial asset, typically with yearly service contract

vendor retains ownership of the asset, sells utility as a service


Industrial machines: from product to service

59

“Sell locomotion, not locomotives”

-- GE

“Power by the Hour”-- Rolls Royce

IoT data

zero unplanned downtime

vendors take on the risk of ownership

sales of additional software and data services

(e.g. capacity optimization)

enables

enables

enables


Business models shift in Smart Home

60

services

tangible products


sale of connected product(Smart Home device)

connected product is point of sale for consumables

Smart Home: e-commerce


Every Smart Home device becomes an e-commerce point of sale

61

E-Commerce revenue enables subsidized hardware, i.e. the Kindle model.

IoT extends e-Commerce affiliate and user acquisition schemes beyond websites, mobile and apps, into every physical object.


Business models shift: consumer gets paid

62

services

tangible products


sale of connected product(smoke detector, car data dongle, wearable)

subsidized IoT device bundled with service (e.g. insurance, energy rebates)


From ‘consumer pays’ to ‘consumer gets paid’Subsidizing devices from other revenue streams enables more growth

63

Nest Safety Rewards

smoke detector bundled with

home insurance

Nest Rush Hour Rewards

allowing energy providers to control the thermostat in

exchange for rebates


From ‘consumer pays’ to ‘consumer gets paid’Subsidizing devices from other revenue streams enables more growth

64

Oscar Health Insurance

health insurance bundled with

Misfit activity tracker

Automatic

Connected Car app & servicesconnected to

usage-based car insurance


The prevalent business models in the Internet of Things are

moving from product sales to recurring revenue, and from

products to services.

Product-as-a-Service, devices as a distribution channel for

e-commerce, and for insurance, are some of the key

business models to watch.

take-aways

read more

The Commerce of ThingsIoT Report Series

http://vmob.me/iotmegatrends2016Reports

http://vmob.me/iotmegatrends2016CommerceThings


http://vmob.me/iotmegatrends2016DB

IoT Megatrends 2016 | © 2015 VisionMobileCopyright VisionMobile 2011

Knowledge. Passion. Innovation.

Updated: 12 November 2010

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IoT Megatrends 2016

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Transcript of IoT Megatrends 2016