“Smartphones plateau and decline.” It could be the title of a scary summer shark flick for the electronics industry, but it’s a reality that a mounting body of evidence supports: handset sales, profits, app downloads, and even innovation itself are flatlining, hitting financials at Samsung and Apple (which both now spend more on patent litigation than R&D) while RIM, HTC, and Nokia struggle to survive at all. In the same process that desktops, notebooks, feature phones, PDAs, and every other information appliance in history has passed through, smartphones are poised to peak and then plummet between now and 2016, leaving electronics industry execs scrambling for the safety – the next big thing, like:
- Wearables. Smart watches and glasses may buy the industry one more cycle, but competitors like Pebble and Google Glass beat the incumbents to those markets. And how much smaller can computing go after that – smartrings and smartpens? Wearables offer temporary safety, at best.
- The Internet of Things (IOT). Low-cost computing, communications, and sensors will allow billions or trillions of objects to share data – an internet of things. Hundreds of startups are spawning at places like HAXLR8R, shipping products like the Nest thermostat. But the corporate IOT is mired in unimaginative smart lightbulbs, personal weather stations and coffeemakers that text you when your java – the drinking kind – is hot. In the scary summer movie, the consumer IOT is the red ocean in management strategy terms, full of sharks and blood.
- Industrial IOT. We certainly see environmental and economic opportunities in the industrial IOT: smarter commercial buildings (client registration required), water management systems (client registration required), electrical grid (client registration required), city infrastructure (client registration required), farms (client registration required), and factories – and have written extensively about them. But as leading manufacturer Bosch put it in a recent Harvard Business Review article, “the mere prospect of remaking traditional products into smart and connected ones is daunting… embedding them into a services-based business model is much more fundamentally challenging.” The technology is hard for outsiders, and incumbent manufacturers will fight consumer electronics companies who try to take too much of the market.
Possibly the biggest promise of all – the blue ocean strategy – is in networking things in motion. The things that move – from smart-textile garments and self-driving cars to robots and satellites – are wholly different from immobile devices, and constitute a vastly greater set of challenges and opportunities. In many industries, the greatest growth over the next years and decades will come from these emerging distributed, mobile hardware platforms.
Why is “motion” a step change? Because it requires real-time interaction with a changing, immediate physical environment – guided by sensors and actuators that can’t rely on network connections that may not be there when needed. Because the virtual environment of nearby devices and protocols is in constant flux, so messages between devices may be incompatible, incomprehensible, delayed, or dropped. And because the physical/virtual hybrid world – optimizing a vehicle’s route through traffic to a fueling station, or a patient’s dose of post-meal medicine – demands real-time calculation of equations that no human yet understands. These critical differences make the IOTIM vastly different from fixed IOT – giving innovative manufacturers an opening they should quickly seize.
Click here to join Research Director Mark Bünger on September 4th, for a complimentary webinar describing the cross-industry threats, opportunities, and strategies identified by Lux Research’s analyst team.
Click on the following terms from the above graphic to open relevant Lux Research profiles, insights, and reports (client registration required): desktop PCs, servers, lab instruments, building automation/mgmt systems, smart grid, charging stations, fueling stations, farms, notebook PCs, factory equipment, in-home medical monitoring, smart packaging, nanosats, food and beverages, pharmaceuticals, cosmetics, smartphones, wearable computers, personal diagnostics, autonomous vehicles, aerial drones, medical implants, smart textiles, mobile robots.