Connected objects as a

strong market game changer?

Samuel ROPERT

Senior Consultant, IDATE

18 November 2015

Connected Things Forum

Copyright © IDATE 2015, 2

Agenda

• Scope of Internet of Things market

• Main market figures

• New segmentation with emerging markets

• Focus on smart home

• Focus on Industrial Internet

Copyright © IDATE 2015, 3

Many different concepts and markets under one umbrella

Source: IDATE, Internet of Things, October 2015

Primary value

without

connectivity

Primary value

from connectivity(can be in real time or

differed through sync)

Direct

connectivityMachines

or specific hubs

M2MConnected cars, smart meters,

alarms, point of sale, remote

health monitoring…

Connected Information

Devices

Indirect

connectivityThrough an

information device,

typically

a smartphone

or STB

Objects with

electronic IDSupply and retail chains (RFID,

NFC, QR Code)

Wearables & gadgetsActivity trackers, fitness gadgets…

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Different market dynamics and orders of magnitude… By 2025, 155 billion ‘things’ across the world, up from 42 billion in 2015 (14% CAGR)

• The ‘Objects with an 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.

Source: IDATE, Internet of Things, October 2015

0,00

20,00

40,00

60,00

80,00

100,00

120,00

140,00

2013 2015 2018 2020 2022 2025

Objects with an electronic ID M2M

Connected information devices Wearables and connected objets

Objects with electronic ID as a leading concept, in volume

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… and different value chains & player positionings

Source: IDATE, Internet of Things, October 2015

Hardware Connectivity Data

management Information

system

Value added

services

M2M

Objects with

electronic ID

Connected

information

devices

Wearables

&

connected objects

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New segmentation with emerging markets

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Focus on smart home

Broad ecosystem

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 will be connected? Are all data valuable?

Source: Smart home energy

(Too?) many applications

Source: Arthur D Little

Fragmented smart-home landscape

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Focus on smart home - Lack of services on the top of certain devices

Source: IDATE

Products

Product-

based

services

Value added

services

(VAS)

Thermostat

No clear VAS

Remote control over

different appliances

(HVAC, etc)

Energy cost

savings

Smoke detector,

camera, etc

• Remote monitoring

• Videosurveillance

Automated

emergency calls

+

peacefulness

Dish washer

Dish cycle alerts on

tablet/smartphone/TV

Smart home market drivers Niche market applications (still for medium time)

Remote set timers, check

cooking status, preheat

Oven

…

No clear VAS

Are all data

valuable

??

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Focus on smart home

The smart home market will take off but it will take (much) longer time than expected

Main barriers for smart home market development

Source: Bloomberg West/ Survey Monkey

Few drivers

• 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

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Focus on Industrial Internet of Things (IIoT)

Two major concepts

• Smart factory through networked production

• Connected end-products/machines

Many opportunities from connected objects

• Cost-saving opportunities (internal optimizations)

• New services will emerge

Services : towards a major business shift

• More and more services on the top of their products

• Or even instead of their products (Product As A Service)

Already a reality !

• Leading industrial giants having their own data-oriented department (GE, Safran, Michelin, etc)

• GE generated over 1 billion USD around this new business in 2014.

Source: GE

GE data-oriented offering

Connected objects will become one

of the key pillars of the industrial

giants in their servicisation strategy

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Focus on Industrial Internet - Michelin use case

A real shared value for the Michelin and its customers

Source: Michelin

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Focus on Industrial Internet - Michelin use case

Towards a deep business transformation

Source: IDATE

Products

Product services (internal services)

Information services (external services)

Non-connected

Product line (still exists) Connected product line

Co

mm

erc

ial

off

eri

ng

Preventive tire monitoring Scheduled fleet maintenance

Go-to-market approach

• EFFITIRES Tire expenditure

optimization solution (EUR/1000 km)

• EFFIFUEL Fuel consumption

reduction service

Tire As A Service

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Agenda Keynote Luc BRETONES, EVP Technocentre & Orange Vallée, Orange

Roundtable: How will connected objects impact our lives?

Moderated by: Vincent BONNEAU, Head of Innovation Business Unit, IDATE

• Olivier CARMONA, Director of Business Development, Awox

• Xavier BOIDEVEZI, Vice President Business Development & Digital, SEB

• Bernardo CABRERA, Head of M2M Marketing & Projects Management, Bouygues Telecom

• Ludovic LE MOAN, CEO, Sigfox

Keynote Paul-Edouard LAUNAY, Country Director, Jasper

-------------------- Break -------------------------

Keynote David de AMORIM, Innovation director, La Poste

Roundtable: Industrial internet : Towards the next industrial revolution ?

Moderated by: Ezio ARMANDO, Managing Director in charge of Emerging Technology for Europe, Africa and Latin America, Accenture

• Vincent CHAMPAIN, Operations Director, GE Corporate France

• Didier GUILLOT, Innovation and multi-utilities Direction, director, Sagemcom

• Rolf RIEMENSCHNEIDER, Head of Sector for Internet of Things, European Commission

• Soline OLSZANSKI, VP Strategy & Innovation, Hub One

• Olivier ROUXEL, in charge of RFID & IOT missions, DGE

Conclusive Keynote Raj TALLURI, Senior Vice President, Product Management, Qualcomm