IoT strategies: connecting the dots

IoT strategies: connecting the dots

Mobile companies are using a number of different strategies to target the growing Internet of
Things (IoT) market. Partnerships are popping up across the industry as manufacturers, retailers and carriers work together to create go-to market capabilities for IoT.

At present, companies are moving in different directions and seeking various opportunities within the IoT space. Chip maker ARM believes that in order to bring IoT into the mass market, an ecosystem needs to build to bring hardware and software makers together, to create an easy way to bring products to market.
Partnering to create such an ecosystem has seen manufacturers and networks collaborate, with Telefonica and Samsung working together to create a platform to accelerate the adoption of IoT.

The two companies claimed that collaboration is essential to achieve this, a sentiment reflected in the industry as companies look to a revenue share model. This involves a number of companies partnering together to form various parts of an IoT ecosystem, distributing the revenue of any products between companies involves.

Sharing success 

A revenue share approach has been adopted by Kii, which provides a cloud platform to which IoT devices can be connected. Kii integrates a number of components to create a system upon which to build relationships with device manufacturers. The company used this platform to create an IoT ecosystem by partnering with distributor Brightstar and telecoms company Softbank.

Co-founder and CEO, Masanari Arai, says: ‘IoT sale and distribution is also very important. System integrators form one aspect of this, but how do you monetise an IoT device? Prior to the internet, devices were often standalone – but now they are connected to the internet – you can now provide a very interesting monthly type service as well as selling the hardware. ‘This will change the business model for device manufacturers.

'Before, the worry was the cost of the device, cost of distribution, warranties and those sort of things. But if what you are selling now is a $5 per month service with lots of revenue, you can scale it. ‘We created an IoT ecosystem with Brightstar and Softbank called Space. Brightstar has a lot of distribution customers and billing relationships with carriers. Kii has device manufacturer relationships with interesting solutions.

'This creates a supply-demand ecosystem and we provide a solution from here. The carrier just has to pick that up, get a monthly fee from the customers, and then do a revenue share. It is a very scalable solution. ‘We start the relationship, then Brightstar or the carrier takes over and shares out the revenue to all parties. We are focusing on IoT products for kids and the elderly, but the carriers need to identify key groups to sell specific things to when it comes to IoT/wearables etc. The interesting thing is thatIoT solutions are not really selling at the moment. We are more at the trial stage and have not identified what will sell yet.’


The selling point

Samsung has taken a different approach to IoT, revealing ambitions to take a lead in the market. The manufacturer launched a number of IoT and wearable product ranges with this goal in mind. The philosophy of the company is always to drive categories forward as the market leader, with the belief that its partners expect it of the manufacturer. Samsung’s UK mobile head, Conor Pierce, says: ‘The market is incredibly competitive, it’s very
saturated. There has been an apathy in the market in terms of smartphone saturation and  we are driving a new agenda, not just to bring beautiful devices but also to build categories.

‘It was a big moment for us when we launched SmartThings and that was our first generation. For us that’s a seed that we will nurture and we believe that will be the future –  the next wave of growth for the mobile market – and there is a big change in the air. Our partners are looking to us to help answer the question – how do we bring the connected home to life? There’s no other vendor, no other supplier, that has the breadth of our supplier, so that’s the next wave.’


 Monetising IoT 
While manufacturers and chip makers look at creating IoT devices, the challenge for the service
providers is how to connect these products together. EE has predicted that it will support 4m connected devices on the network by 2017, revealing plans to drive forward in the connected market. Virgin Media has taken a different approach, waiting to see how it can differentiate before it reveals its IoT strategy.

Neil Illingworth, head of advanced technology and innovation, explains that Virgin Media is still deciding which hand to play. He says: ‘We won’t all look the same in IoT but something we need to take seriously is how can we be different? That is why we haven’t launched connected home services, as we are still looking for that differentiator. If we do something it needs to be different – but we are Virgin Media, that’s what we do. It depends where the money is, and it is still a battle.’

Convincing the consumer

Retail is a key battleground when it comes to IoT. While the industry is making progress with the technology involved, it all means nothing if consumers do not buy the products. Dixons Carphone is looking to bring IoT onto the high street with the launch of its honeyBee home platform, which involves a Recommend feature that works in a similar way to the retailer’s Pinpoint tool. 

Steve Moore, director of Dixons Carphone’s Connected World Services division, explains that the focus should not be on the IoT technology but rather in helping consumers to use the products available. The high street retailer has pushed into the IoT market with a range of connected home products that it will sell in its retail stores, alongside its current product range.


However, selling a customer a mobile phone is a different game to selling a customer a complete range of connected home devices, and Moore explains that at the moment, it’s about raising awareness.
He says: ‘Our connected home products are not making money but people are getting interested in them, particularly in healthcare. As part of our Honeybee Home platform, we are launching a button that will locate the problem when it is pushed and our team will resolve the problem. The money in IoT is not in the “things”, it is in helping people use the “things” and we’re currently running trials using our Smart Home platform.’


Pain-free tools

In order to ‘take the pain away’ from retailers attempting to sell IoT products, UK distributor Brightstar recently launched a new ‘Smart Living’ connected home proposition. This features a range of connected products and services aimed at helping retailers cash in on the growing market.

Strategic propositions director at Brightstar, Joyce Mercer, says that currently much of the retail market does not know how to sell IoT to consumers. She says: ‘We know that growth will come from connected and SIM-enabled products, but until now very few retailers and operators have managed to find a way to successfully take to market. We aim to deliver a market-leading solution, which will ultimately offer a seamless experience for the end user.

‘We select the right products that are relevant and add value; it’s about using our expertise to not only pick the right solutions but also help our customers sell, either through a seamless in-store experience or multiple services to make the journey easier for customers.

‘No two retailers are the same and our approach is to build the right solution for them. While there is no shortage of interest in connected products, it’s fair to say that most haven’t yet capitalised on the opportunity or defined their strategy. Our proposition is about taking that pain away and working in true partnership to deliver the right customer experience.’ 

Driving new directions

With much of the focus centred around the connected home and wearables, companies are looking at different channels through which to appeal to the consumer, and many believe it lies in connected cars. Both Rainbow Comms and Mediatek are pushing into this market, with the latter explaining that car makers are now requesting 4G functionality to be built into the car to meet the change in consumer demand.

J.C. Hsu, GM of new business development, says: ‘Right now we’re just in the beginning stage with connected cars, compared with wearable and the smart home. We began our journey in the automotive industry this year so we do have some business within navigation, multimedia functionality etc. We also receive some requests from car makers to help them embed 4G connectivity functions, and we are trying to make some solutions for them.’


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