Wearables bling. Engineers can build just about anything even if there is no market for the item — welcome to the 2014 Consumer Electronics Show (CES). If you haven’t heard, let me be the first to share the news that wearable IoT is all the rage at CES in Las Vegas this week. Did you know that every little bangle and bauble can be connected via Bluetooth, WiFi or mobile technology? It’s true. So why shouldn’t your great-grandmother’s pearls post an update on your Facebook account when you enter the latest trendy restaurant in Cleveland? Or why shouldn’t you wear a pendant around your neck with rotating pictures of your children, pets and family vacations from the last 6 years? Or why not don a tiara that belches its own gleaming, rainbow-infused light show with an HD-YouTube-video chaser?
I’m starting to feel ill already.
IoT is about connectivity and experimentation. Lots of good ideas come from these things, no doubt. However, let’s remember the two reasons why IoT solutions have value and are implemented. See the figure below.
- 85% or more of the IoT solutions adopted today cause some sort of operational efficiency and cost savings. The solution improves a business process or in some cases a personal process. This process improvement has direct impact on efficiency, quality, security or reliability. Improvement of this sort has a tangible financial value and, therefore, businesses are willing to invest some money to implement and run an IoT solution that yields a financial value. A good example would be IoT solutions on heavy construction vehicles to track usage and maintenance schedules.
- The remainder of today’s IoT solutions cause product-to-service innovation. Connectivity is added to a product and that product changes into or is enhanced by a new service. A good example would be adding connectivity to an automobile. The connectivity adds a new service to the automobile with applications like infotainment, concierge services and others. These services have value for which someone – an automobile manufacturer, the automobile owner or a third-party – is willing to pay.
Wearables fit into the second adoption category; product-to-service innovation. But let’s look at the ROI metrics associated with the adoption of these wearable solutions. First, the incremental services developed on top of the wearables tend to be mash-ups of existing applications like geo-location, social networking and others. Mash-ups can be good ideas, so we give developers credit for this one. Second, the entertainment value of most of these products is dubious at best — sort of like the Christmas presents used by your child once and then discarded in the back of a closet. Finally, are there advertising or cross-platform marketing opportunities for these wearables? Maybe somewhat, but the business models have not been fully proven and as such it is going to be hard to convince advertisers to take the gamble – even in Vegas.
Thanks again to the engineers for designing these products. Sales people certainly have their work cut out for them in actually selling these things.
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