Internet of Things
How the Internet of Things is Impacting Product Value
21 November 2019 | Team EACPDS
The internet of things and the capability to connect to the internet suddenly brings all kinds of new implications for products and their value. The internet of things is fundamentally changing how products function and how customers derive value from them.
How the internet of things is changing products and impacting what customers perceive as product value
Products today are becoming a combination of physical components, smart components, and connectivity components. Each of the 5 layers of the IoT stack plays a role — core product infrastructure, sensor systems, connectivity, analytics, and smart applications on an IoT platform.
While all three elements — Strategy, Connected Things, and true IoT platforms — seem somewhat elemental, balancing these will be central to the success of any IoT enabled business initiative.
For instance, look at a simple product, such as the light bulb. What is the product? In this case it’s the light bulb itself. What is the value of the product? I’m not talking about the monetary value, but rather the reason, need, or problem that drives the product purchase in the first place.
You might say in this specific case, the value of the product is the light that it provides, the illumination it creates, or perhaps the extension of functional hours it delivers.
What if we were to add connectivity to the product? By using an app on a device that controls the bulb via Bluetooth connection, you could now change the color of the light remotely. You could control the function of the light bulb with the sound of your voice. You could use the products new functionality to simulate the sunrise and replace your alarm. You could even sync the bulb to reflect your fluctuating stock prices! There’s a host of applications now available – just for a single light bulb.
Revisiting the original question, evaluating your new connected light, what is the product? Is it still just the bulb? What about the app that controls it, or the device that supports the application? It’s really an interesting question to consider. It’s really an interesting question to consider. For this same connected product, let’s talk about its value.
Again, I’m not talking the connected product’s monetary value, but rather the reason the product would be purchased in the first place. Would it still be just for the light or illumination, or is it the array of colors, new features and functionality? The fact of the matter is – the value of the product has changed. The connected product now adds value in the form of light, remote control, entertainment, and even overall experience.
Products and their value are changing
As a consumer shopping for an original bulb, you were most likely looking for a certain wattage or color (such as yellow or white) – not an experience. The connected product now adds value in the form of light, remote control, entertainment, and even overall experience.
Now that products are changing and you have systems of products: an app, a bulb, connectivity; the product value changes as well. You now have the ability to look for a light that can be synced to music or sound. A light that simulates the sunrise. A light that you can control from your device. You now need to weigh product value against a slew of new price points, features, and the support the manufacturer will provide over the years.
There’s no question that the value of products is changing because products themselves are changing. We’d like to help you map out this new world. If you’d like to do anything from brainstorm potential impacts to your business, develop a full strategy for IoT at your organization, create proof-of-concepts, or implement underlying technology… you’ve come to the right place.
We’re your partner in the ever-changing world of the internet of things.