Connected objects have now entered our everyday lives, extending product and service functionality for the consumer. This phenomenon is now starting to shake up manufacturing companies.
In January, Smokio launched a ‘connected’ electronic cigarette on the French market. If this seems fairly unexciting, the fact that a product which is relatively new on the market has already morphed into a connected object illustrates the momentum behind the connectivity trend. The fact is that the Internet of Things (IoT) is now a global movement that consists of widespread data gathering through objects embedded with sensors, plus internal computing power plus Internet connectivity. The data is then used to analyse behaviour and the user is informed of the results.
Figures show that this is now a booming market. IDATE estimates there are 15 billion connected objects in circulation, a figure which the European think tank reckons will increase to around 80 billion by 2020. Forecasts vary from one consulting firm to another: US market research firm IDC, for example, estimates there will be 212 billion connected objects worldwide in six years’ time. Anne-Sophie Bordry, President of the French Think Tank Objets Connectés & Intelligents (Think Tank on Connected and Smart Objects) underlines that whatever estimate we take, "the figures indicate that connected objects are experiencing exponential growth and we’re moving towards a totally connected environment." So should manufacturers be launching their own lines of connected products? Aren’t we risking an ‘overdose’?
IoT attracting startups and investors
At the present time, companies that are producing these objects are for the most part startups which have built their entire business model around connectivity, a good example here being Nest Labs, which was bought by Google for $3.2 billion. The firm developed a connected thermostat that enables you to remotely control the temperature at your home so as to optimise your energy consumption. Withings, which specialises in connected tensiometers and scales, is another example. At end-2013 Paris-based fund-raising consultancy Chausson Finance identified the firm as the third-largest venture capital fund-raiser in France, having obtained €22 million in financing. Not bad for a company that is just six years old.
It was an obvious move for these startups to add a layer of connectivity – and thus service – to basic objects, at a time when the means of generating and using data is becoming available to everyone. The idea is that the physical object is no longer an end in itself, but rather a vehicle for providing services. This is very much the case for Withings, which measures your weight and your heart rate and also offers coaching advice. Another example is Kolibree, which has developed a connected toothbrush that was unveiled to much acclaim at the Consumer Electronics Show (CES) in Las Vegas earlier this year. “Kolibree promises to improve people’s long term oral hygiene by giving them feedback on their brushing habits,” explains co-founder Loïc Cessot. Its recent Kickstarter campaign was intended to test the market and gauge the general public’s reaction to this innovative toothbrush. In the longer term the firm hopes to “become a global platform for preventative care and improvement in oral hygiene which brings together all the players in the field – dentists, dental hygienists, users and manufacturers,” reveals Cessot.
Smokio’s approach also illustrates the move from product to service. Using the smartphone app developed for the electronic cigarette you can track your consumption. Moreover, the app measures the overall impact on your health if you had smoked an equivalent number of real cigarettes, and it adds a collaborative and community dimension as these results can be shared on the social networks. “It’s all very well knowing that stopping smoking adds to your life expectancy and improves your health, but it’s difficult to see any impact in the short term. So our aim is actually to encourage the smoker to stop smoking entirely, whether we’re talking about traditional or electronic cigarettes, by providing him/her with a dashboard that shows how his/her health is progressing,” explains Smokio co-founder Alexandre Prot. The picture is clear: we’re moving towards a system where it’s not so much about the value of a physical device but rather all the solutions it can offer you to help improve your day to day well-being.
“It’s more than likely that the hardware will take a backseat to the software when it comes to attracting the customer and that we will move to a model based entirely on paying for the service,” predicts Olivier Mével, a pioneer in connected objects who co-founded Violet with Rafi Haladjian.
Traditionnal manufacturers are testing the market
So is this the signal for a revolution among companies whose business model is today simply based on manufacturing items which surround us on a daily basis? For some brands – French tennis, badminton and squash equipment company Babolat, for example – the answer is yes. At CES 2014, the firm showcased the first-ever connected tennis racquet, the Babolat Play Pure Drive. The racquet enables the player to measure his/her performance – forehand power, number of backhands, running speed etc. – by means of sensors embedded in the racquet handle. This is a major step for the racquet manufacturer, and a way of testing the market to see whether implementing a whole ecosystem based on data should be replicated across the rest of its product range.
In the same vein, Oral B has emulated Kolibree by launching a connected toothbrush which measures the time and quality of brushing and identifies those areas which have or have not been properly brushed. This preventative approach could lead to users spending less time at the dentist. “This shows that even the largest players on the market believe that innovation in oral hygiene is all about access to information. This certainly creates competition for us, but it also basically enhances our credibility,” underlines Loïc Cessot. Meanwhile Anne-Sophie Bordry wonders about how the IoT market will develop: “Will a powerful Internet market leader in this field be able to emerge without having a basis in traditional industry, or the reverse – will manufacturers as we know them succeed in incorporating into their large-scale production processes all the elements needed to create connected objects that meet people’s habits and uses?” The jury is still out on this question. Anne-Sophie Bordry would like to see startups collaborating more with established majors in order to capture synergies between their respective strengths: “The flexibility of a startup allied with a major operator is the key to success for the connected objects industry,” she argues. What is certain is that here once again the ‘Barbarians at the Gates’ are forcing companies to think about radically changing their business model.
Adopting connected habits
Such changes will however come over the longer term. For the moment, although people talk a lot about them, connected objects in the form of wearables and connected devices appeal to a clued-up section of the population which gets immediate value from them and they are still a long way from becoming a must for all. Mark Curtis, Chief Client Officer at Fjord, the design and innovation consultancy which is part of Accenture Interactive, argues that if wearable technology is to be integrated to best effect, it must be made acceptable to everyone. This can only be done by adapting the technology to its users and encouraging the growth of ‘digital routines’. Ever the optimist, Mark Curtis believes that the progress of ‘wearables’ will be very similar to the rise of the smartphone. Nicolas Nova, co-founder and researcher at the Near Future Laboratory, a laboratory specialising in the innovations of tomorrow, stresses that the success of connected objects will depend on how far they can really become part of our existing habits and integrate into our everyday lives. That being so, ambitious connectivity entrepreneurs should be focusing their minds on ordinary, everyday objects.
The principle seems to be: don’t try to change the nature of the basic product, but look to add new functionality, which can become part of users’ everyday lives. According to Nicolas Nova, people developing connected objects need to ask themselves what value they are adding to the original item. In a discussion paper entitled ‘Les nouveaux Eldorados de l’économie connectée’, (‘The New Eldorados of the Connected Economy’), French digital think tank the ‘G9+ Institute’ talks about “dematerialising connected objects”, stressing that “design is there to serve use.” A striking example of this is Sen.se Mother, a basic product touted as ‘the mother’ of connected objects. The product is capable of turning any item into a connected object by equipping it with one of the brand’s sensors so that the object can then be controlled through a specially designed app. Mark Curtis also talks about the idea of a connected mirror, which could revolutionise habits because “there’s nothing more natural than looking at yourself in the mirror when you’re getting ready in the morning, and it’s an object than we pass in front of every day.” Nicolas Nova points out that whereas today connected items are all just connected to the Internet, the end goal must be to have mutually inter-connected objects. “This is the logical step, but first of all we need to have technical standards and there’s one question that must be answered: connect for what purpose?" he argues.
However, this growth in connected objects and permanent access to information may also incur security risks. Although companies are today making efforts to incorporate data protection into Internet-connected items, the advent of new products could well lead to a lowering of security standards. “As soon as objects become cheaper, less data protection will be provided,” warns Olivier Mével. Laurence Allard, a senior lecturer at the Paris 3 and Lille 3 Universities who specialises in digital practices, underlines that that the connected objects market is directly correlated to Big Data, which is the real source of business, pointing out that “connected objects are part of a general movement to extend connectivity. It’s about connectivity, plus ‘smart’ objects plus computing power to process the data.” She also thinks that fundamental questions around data protection should be asked right now as there are some real social and legal issues here: “We need to make sure that data protection is understood from every angle because mere acceptance doesn’t make for a good model to follow. We need an approach based on formal consent,” she insists. Looking at the challenges of ‘transhumanism’, i.e. the relationship between people and technology, Ms Allard thinks that a useful ‘metaphor’ for co-existing with the new technologies is the sort of companionship people derive from their domestic pets. We don’t need to actually become machines made up of sensors, she argues.