Internet of Things markets

Transcription

1 IOT lead analyst Samuel ROPERT +33 (0) Internet of Things markets IGNES - Paris 30 juin 2016

2 Agenda Scope of Internet of Things market Main market figures New segmentation with emerging markets Wearables M2M (Short) focus on Industrial IoT Focus on Smart home

3 Scope of the Internet of Things Many different concepts and markets under one umbrella Direct connectivity Machines or specific hubs Primary value without connectivity M2M Connected cars, smart meters, alarms, point of sale, remote health monitoring Primary value from connectivity (can be in real time or differed through sync) Connected Information Devices Indirect connectivity Through an information device, typically a smartphone or STB Objects with electronic ID Supply and retail chains (RFID, NFC, QR Code) Wearables & gadgets Activity trackers, fitness gadgets Source: IDATE, World M2M Market, November

4 Strong but heterogeneous growth of IoT markets By 2025, 155 billion things across the world, up from 42 billion in 2015 (14% CAGR) The Objects with electronic ID leads market by far (80% of total things) 'Wearable and connected objects' will comprise 1.4 billion units in 2025 but fastest growth (30% CAGR) over the period. Objects with electronic ID as a leading concept, by volume 4 Source: IDATE, Internet of Things, October 2015

5 IoT scope with impacts on value chains and related player positionings Product manufacturers Positioned mainly on the hardware segment, but there could be strong variations MNOs Naturally present on the connectivity segment on M2M and connected-information devices. Internet giants Mainly addressing the consumer market Clearly positioned on the VAS (their core business) and data management IT integrators Mainly positioned on the professional markets (IT side & data management through their cloud services) Hardware Connectivity Data management Information system Value added services M2M Objects with electronic ID Connected information devices Wearables & connected objects Source: IDATE, Internet of Things, October 2015

6 Towards a new IoT segmentation M2M, which includes industrial and closed loop-based applications. Wearables and connected objects which currently do not communicate between each other. Industrial Internet, referring to the smart-factory concept where multiple applications interact with others to optimise all internal processes. Smart home concept, where all appliances aim to converse with others even without accessing the Internet Internet of Things markets Source: IDATE, Internet of Things, October

7 Bulk of M2M revenues coming from IT/software services Market will develop through various verticals Previously based on industrial applications Now driven by three key verticals (automotive, consumer electronics and utilities) in volume, thanks to regulation in some regions across the world In the longer term, emerging segments will include healthcare and the concept range will include smart cities. Mature development should take longer than expected as debate continues around business doubts. The M2M value chain is very fragmented Combination of value chains The bulk of M2M revenues should come from software and IT integration Primary objectives: to make massive cost savings within the verticals. all players to provide end-to-end offering with a strong focus on services Drivers Regulation and public policies within certain verticals, chiefly automotive and energy. Barriers Financial side Total cost of ownership Doubts on business models for some applications Lack of education of the marketplace. M2M development through vertical markets Source: IDATE, Internet of Things, October 2015 M2M value chain Source: IDATE, Internet of Things, October

8 Adoption of wearables and connected objects is suffering from lack of services The ecosystem is mainly dominated by object manufacturers Today, MNOs are absent from this market as connectivity providers Only on the distribution side The smart home market suffers from a lack of services on top of devices Early adopters are not benefiting from value-added services, but only receive gross data. Adoption is still very limited for now Even the Apple Watch is not meeting its expected success. Main focus of various connected wearable devices Main pure players Main focus Withings Wellness Fitbit Fitness Nest Security and energy efficiency Netatmo Security and energy efficiency Jawbone Fitness MyFox Security and energy efficiency Source: IDATE, Internet of Things, October 2015 and even facing decreasing interest from device owners. Different polls/surveys show the abandonment of connected wearables after 12 months only Adoption survey, key wearable devices Drivers Maturity of the technical solution, such as standardised networking technologies. Growth of smartphone adoption Absence of telecom costs for the majority of devices Price of the connected wearable is a major barrier More expensive by far as the bill of material (BoM) increase compared to non-connected devices (with similar features). Standalone devices Privacy concerns for devices generating personal data (which are expected to grow). 8 Source: Accenture, January 2015

9 Industrial Internet : IoT as a key pillar of digital transformation of verticals Two major concepts Smart factory through networked production Connected end-products/machines GE data-oriented offering Many opportunities coming from connected objects Cost-saving opportunities (internal optimization) New services will emerge mainly through connectivity itself (remote control applications), data generated by machines. In the industrial world, multiple changes are expected More and more services on the top of their products Or even instead of their products (Product As A Service) Companies could shift their core business model From a product sale towards a service offering. Already a reality! Leading industrial giants having their own dataoriented department (GE, Safran, Michelin, etc) GE generated over 1 billion USD around this new business in 2014, 5 billion USD in 2015 and over 20 billion expected by Source: GE Connected objects will become one of the key pillars of the industrial giants in their servicisation strategy

10 Commercial offering Focus on Industrial Internet - Michelin use case Towards a deep business transformation Information services (external services) EFFITIRES Tire expenditure optimization solution (EUR/1000 km) EFFIFUEL Fuel consumption reduction service Product services (internal services) Scheduled fleet maintenance Preventive tire monitoring Tire As A Service Products Non-connected Product line (still exists) Connected product line Source: IDATE DigiWorld Go-to-market approach 10

11 Focus on smart home Broad ecosystem (Too?) many applications Often seen as the connected version of home automation (Too?) many applications under the smart home umbrella - pure lifestyle applications - vertical applications (security & energy management) (Too?) many different players - Traditional consumer electronics manufacturers - Household appliance providers - Players from energy, lighting, security and others Value chain dominated by product makers Bulk of revenues come from product sales. Services could emerge in the future but they will still be very limited - Many doubts exist about viable business models, related to interest of data and monetisation issues. - Will all objects be connected? Are all data valuable? Source: Smart home energy Fragmented smart-home landscape Source: Arthur D Little 11

12 Focus on smart home - Lack of services on the top of certain devices Value added services (VAS) Productbased services Energy cost savings Remote control over different appliances (HVAC, etc) Automated emergency calls + peacefulness Remote monitoring Videosurveillance No clear VAS Dish cycle alerts on tablet/smartphone/tv No clear VAS Remote set timers, check cooking status, preheat Are all data valuable?? Products Thermostat Smoke detector, camera, etc Dish washer Oven Source: IDATE Smart home market drivers Niche market applications (still for medium time) 12

13 Focus on smart home Few drivers Main barriers for smart home market development Applications like security, energy management More and more offerings from Telcos (security centric) But many strong barriers to remove Still numerous siloed approaches Technical fragmentation Home networking (AllJoyn, DLNA, UPnP, etc) Many networking proprietary platforms Price levels of these products ratio 10:1 compared with non-connected devices with similar features Privacy and security issues Google threat (Nest acquisition, Brillo platform & Thread protocol) To collect more and more personal data which it aims to monetize Source: Bloomberg West/ Survey Monkey The smart home market will take off but it will take (much) longer time than expected 13

14 Market estimates Nascent but perceived as a promising market with more and more consumers attracted to purchasing a smart home system From 200 in 2015 to 900 million objects by Growth still limited in specific applications First devices to be adopted linked to energy management and security and safety systems. Smart Home market evolution, by region, (Million objects) North America Europe Asia Pacific Latin America Source: IDATE in Internet Of Things, October

15 Qui sommes nous? IDATE DigiWorld, l un des instituts européens de l économie numérique les plus renommé, est spécialisé sur les marchés télécoms, Internet, médias et territoires numériques. Depuis 1977, nos équipes proposent des missions de conseil, des services de veille des marchés et un programme de clubs et de conférences afin de décrypter les enjeux de l économie numérique et d éclairer les décisions stratégiques de nos clients. Nous sommes fiers de travailler chaque année avec plus de 400 grandes entreprises et décideurs publics qui renouvellent leur confiance dans nos services, au travers de nos trois lignes d activités : Consulting Services Market & usage analysis Feasibility studies Strategic coaching Public policies Training & Communication Domaines d expertise Reports & Datasets Future Networks Telecom Strategies Media Strategies Internet Economies Yearly programme DigiWorld Clubs in Brussels, London, Paris DigiWorld Summit DigiWorld Future DigiWorld Economic Journal DigiWorld Yearbook Collaborative Research

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