Six key trends in the IoT developer economy for 2016

Every company should master developer ecosystem skills. Our new IoT Megatrends 2016 report sheds light on the state of the art in the IoT developer economy, distilling the major data points and insights from our research into six important trends in IoT.

Software is eating the world. [tweetable]Access to developers has become a competitive advantage in every industry[/tweetable]. Today a business in media, games, finance, or transportation, can only compete by using software to improve productivity and efficiency through every part of the business. Businesses in healthcare, construction and agriculture now find they need to use software developers to remain competitive.

As the Internet of Things takes hold and more and more traditional products get a software component, this trend only accelerates. Already, [tweetable]over 5 million developers are active in the Internet of Things in early 2016[/tweetable]. This year, we estimate that their number will grow by 800 thousand developers. That’s about the population of South Dakota, Macau, or Cyprus. [tweetable]By 2020, there will be close to 10 million Internet of Things developers[/tweetable].

6 key trends for 2016

In our 60+ page IoT Megatrends 2016 report, we highlight 6 key IoT developer trends for 2016.

Developers are more and more the center of commercial strategy. If you’re not into developers, you’re not doing it right. If you believe that the Internet of Things is only about making new, stand-alone devices and solutions, then think again. More and more key players in every IoT market build their strategy around developers who can extend the product beyond what it was when it left the factory. From Amazon and SmartThings in the home, Apple and Pebble on your watch, and Ford and Automatic in your car, all the way to ThingWorx and IBM in industrial settings, 3D Robotics and DJI in drones, and Oculus and Microsoft on your virtual reality headset – developers are key to success in the marketplace. And it’s clear to see why. Our report offers four ways that developers can extend a business: as innovators, customers, extenders, and distributors.The trend towards placing developers in the center of commercial strategy is in full swing. For example, Industrial IoT counts almost as high a percentage of professional developers as the mobile ecosystem does, while the smart home sector trails behind.

Battle of the Smart Home Hubs. Every major consumer technology is vying to become the hub of your home nowadays, from Amazon (Echo) and AT&T (Digital Life) to Xiaomi and Xfinity (by Comcast). It shouldn’t surprise then that with 1.4 million developers, the smart home is the most popular IoT sector. Smart home hubs compete on three axes – new touchpoints, new interaction models and developers – each of which raises important questions for the future. Touchpoints like voice control, next-generation remote controls, apps, and messaging are the core of the user experience, but most solutions don’t come from the maker of the smart home hub itself. Who will control the customer relationship in the future, harvesting user loyalty? Conversational platforms (voice, chat) in particular are coming up strong. Meanwhile, the rise of artificial intelligence fundamentally challenges the central role of developers as creators of use cases. Will developers go extinct? For now, key players still count on developers to drive value creation, also in AI-driven conversation platforms.

The 4 frontiers of wearable platforms. Innovation in wearables is in full swing. Wearables move from consumer electronics devices to being unobtrusively embedded in clothing, which make the technology more and more relevant for traditional fashion companies. Soon, brands will compete on digital identity – an opportunity to create a powerful connection with users. Smartwatches and AR/VR platforms will compete on who has most apps. In smartwatches, Android Wear is under pressure from new platform challengers. On the one hands, Chinese internet companies build their own Android derivatives for wearables. On the other, victims of the Android smartphone strategy build direct challenger platforms based on Tizen or webOS. Finally, our research shows that [tweetable]data-centric apps are more lucrative than simple smartwatch apps or new wearable devices[/tweetable], but that few developers go that way today.

From Connected Car to software-defined transportation. The innovation focus in Connected Cars is shifting from the dashboard to vehicle data, and in the future to data-driven transportation platforms. Car makers struggle to keep control over and to gain access to the necessary supply chain, expertise, and data to be leaders in this evolution. Will car makers miss automotive computing just like Microsoft missed mobile? We’ve explored this trend in depth here.

Consumer and Enterprise technology converge. Consumer and enterprise technology are increasingly converging in most industries. The smart home of today will become the smart office of tomorrow, as smart locks turn into access control and smart TVs into meeting room equipment. The equivalent of wearable-sensor-driven health apps in the enterprise are people analytics, such as the Humanyze platform. And Jeff Immelt, head of GE, famously said this about data technologies developed at Amazon, Google, or Facebook making their way into the industrial world: “If you went to bed last night as an industrial company, you’re going to wake up this morning as a software and analytics company.” Consumer, and not enterprise technology will be the foundation for the converged future. Why? Consumer markets offer much faster product evolution and validation with customers. Consumer-grade ease of installation coupled with enterprise-grade security will be the future. [tweetable]Developers from their side will be increasingly mobile between consumer and enterprise markets[/tweetable].

The hottest business models in IoT. The prevalent business models in the Internet of Things are moving from product sales to recurring revenue, and from products to services. Industrial IoT technology creates opportunities for vendors to sell access to assets like jet engines or locomotives as a service, rather than selling the machines themselves. In the home, smart appliances (e.g. washing machines) are becoming an e-commerce point of sale for consumables (e.g. washing powder). Companies like Nest, Oscar Health Insurance, or Automatic have paved the way for moving from a ‘consumer pays’ model to a ‘consumer gets paid’ model, subsidizing devices with other revenue streams like insurance or energy company rebates.

The full IoT Megatrends 2016 report can be downloaded here for free.

Just out: Developer Megatrends H1 2015

Software developers are a driving force in every industry and a source of competitive advantage. They are the kingmakers of modern business. In our 50+ page Developer Megatrends H1 2015 report (download it here or see the SlideShare presentation), we highlight 4 key developer trends for 2015.

Every day the evidence is mounting: software developers are a driving force in every industry and a source of competitive advantage. They are the kingmakers of modern business.

For mobile devices, there is no doubt. 1.5 million apps on iOS and Android each have propelled us into a new era of mobile computing and given rise to whole industries that weren’t even possible before. Look no further than the havoc that Uber is wreaking in the transportation industry. Developers are not finished with mobile, either. [tweetable]Every year, 800,000 new mobile developers join the pack[/tweetable]. That’s about the population of South Dakota, Macau or Cyprus, every year.

Developers are invading more and more industries and verticals. Our Q1 2015 Developer Economics survey showed that 53% of mobile developers are already involved in the Internet of Things, with many more to come. [tweetable]Our latest estimates put the amount of IoT developers over 4 million individuals[/tweetable].

Developers are conquering the wrist, with 3,500+ Apple Watch apps and 2,300+ Android Wear apps. They’re conquering the car. Android Auto and Apple Carplay will be available on dozens of car models this year. 250+ OBD apps provide aftermarket solutions for car data, with growing support from big players in telecom and insurance. Developers are conquering the home, taking advantage of new technologies and platforms like Samsung SmartThings, Apple HomeKit, Google Weave, Eclipse Smart Home or dozens of device APIs. Developers are even conquering the sky. Major drone players like DJI (from Phantom fame), 3D Robotics (dronekit.io) or Airware are providing SDKs for drone apps, helping developers to put drones to use in industry, agriculture, construction or mining. Cities, healthcare, clothing, factories, … – They’ll all fall to the wave of innovation made by developers.

When we say developers, we don’t just mean hobbyists tinkerers. Developers matter a great deal to businesses. From telecom to fashion, from logistics to lighting, today’s competitive battles are won and lost by attracting developers. To cite just one example, Salesforce took the #1 spot in CRM systems from Oracle, in large part due to its 1.4M strong developer ecosystem. Every modern company must master developer ecosystem skills if it is to thrive in the information age.

4 key developer trends in 2015

In our 50+ page Developer Megatrends H1 2015 report, we highlight 4 key developer trends for 2015.

Developers escape from the app store. Revenue from app store sales or in-app advertising grew by 70% in one year, according to IDC and App Annie. Great news! Or is it? The truth is that [tweetable]the app store alone cannot sustain the mobile developer population[/tweetable]. 60%+ of developers are under the app poverty line and only 1 in 9 is in the safe zone. Most money in the app economy is not made from the app store, but from app-driven e-commerce. Selling offline goods and services via apps represents 71% of the app economy in 2015 – and it’s earned by only 9% of developers! Whether using apps as a channel (like Amazon), building a mobile-first business (like Uber) or using apps as a platform (like WeChat), e-commerce is winning app revenue model and will remain so for the foreseeable future.

Developers escape from consumer markets. There is another way to dodge the poverty trap: target enterprises. Only 20% of mobile developers target enterprises, but 46% of them makes over $10K per month, versus 19% for consumer-oriented developers. Making the jump to enterprise might be easier than it seems. There is substantial overlap in what consumer and enterprise app developers are working on. [tweetable]Many apps can be simply repositioned or repurposed to attract an enterprise audience rather than consumers[/tweetable]. We see a similar pattern among Internet of Things developers. Winning app and IoT developers will repurpose consumer technology and business models to solve the most important enterprise problems, and dodge the poverty trap by doing so.

Apps escape from screens. The app paradigm of bite-sized software is replicated outside of smartphones: it can be found on the watch, desktop, car, TV, browser, and in the home. The nature of apps is changing too. From yesterday’s traditional app like Angry Birds (where the value is delivered by the app itself), we’ve moved to the companion app. In Honeywell’s thermostat-controlling Lyric app, the value is in the device, and the app is just the remote control. [tweetable]The value in tomorrow’s apps will come from making sense of data[/tweetable]. Apps like Apple Health process triggers and signals across devices, sensors and APIs. As a consequence, data developers and data platforms will soon be king.

Platforms escape from mobile. What’s the future of mobile platforms, given the stalemate in platform wars and the evolution to data-centric apps that moves the focus away from mobile OS? Mobile ecosystems like Android and iOS move to the Internet of Things in force, fully leveraging their developer and user bases to gain traction fast across all major IoT verticals. Others like e-commerce players are following in their footsteps, attracting devs with distribution capability and engaged users. Here’s the billion dollar question then: [tweetable]will the network effects from mobile carry over to IoT[/tweetable]? Will the mobile platform duopoly be sustained in IoT? In the future, IoT device selection by consumers and enterprises will be determined by “will it work with my existing services and devices”. We predicted this as early as 2010. In the 2012 edition of the Megatrends report, we talked about the evolving meaning of convergence. From converged networks, to converged devices, to experience roaming. That prediction is now playing out in full.

Download the full Developer Megatrends H1 2015 here.

3D Printing: The 3rd Dimension of Mobile Marketing

In the past couple of years, no other technology has raised more expectations about the future and the way that it will affect our lives than 3D-printing technology. Tens of articles and posts are published every day on this subject. Most articles present 3D-printing with much excitement while others go as far as to predict that every household will own a 3D-printer.

3d-printing

[tweetable]Despite the hype, 3D-printing today is far from a household technology[/tweetable], mostly used by non-professionals for fun, entertainment and utility. Yet there is hardly any talk on how 3D printing can pave the way to consume content in a physical, tactile way and therefore become an unprecedented marketing tool.

Tangible marketing

Marketing until today has been predominantly 2D through graphics sound/music and motion/animation. With 3D printing, marketing can become three dimensional and change how brands interact with consumers in so many imaginative ways. [tweetable]With the advent of 3D printing, the marketing message can be felt, held, used; it becomes tangible[/tweetable]. We are no longer constrained to abstract, virtual worlds or bold slogans and tag-lines. When applied to marketing, 3D printing opens up many dimensions of tangible communication and real-life interaction.

Customization

From mass-production to mass-customization. Some major brands have already started experimenting by employing 3D printing for communication purposes by uploading products’ 3D files and by allowing customers to alter them and print them. Is this enough? Most likely not. Why not think of something more radical, why not surprise people and introduce a touch of exclusivity?

Ok, picture a hotel by the beach (tempting summer destination) that hired a product/fashion designer to create unique, imaginative 3D-printable flip-flops (something like these maybe?) that could be 3D-printed per room booking based on customer’s colour preference, foot size and carry their name. What a great unique give-away gift that can be not only utilitarian, but also stylish, and collectable . Sounds too far fetched? The technology is already here!

Games & Gamification

[tweetable]3D-printing technology adds a physical and tactile substance to ideas and experiences[/tweetable]. How could this technology be relevant to mobile marketing?

Or how about tying 3D printing to the most popular app category: gaming. As mobile games are intangible, transforming part of them into a physical object can greatly enhance the game experience for players. Picture a gamer who wins an award as then complete a new level and can 3D-print their trophy, medal in plastic or even metal. The gamer’s trophy could adorn a shelf, double a jewellery, or form a smartphone accessory that could make it a huge business in Asia. Or how about 3D printable candy to be to be eaten, shared with friends in Candy Crash, with the associated bragging rights, of course.

The gamification of advertising and 3D-printing would has endless opportunities for online or mobile marketing where the audience would have to play a game in order to access to the 3D files of the trophy or award.

Contextualization

3D-printing machines are in a sense small production factories available inside homes, or even public spaces if they take the form of vending machines, they could be found in any public space. This means that the production and delivery venues can be potentially anywhere target customers live, work, travel and socialize.

For example, the insurance company DVV/Les came up with an interesting application of 3D-printing by offering the Keysave,a service which 3D scans your keys and should you lose them, you download and print the 3D-file of your key. A smart promotional activity, close to the core business of the insurance company that widens its appeal to a wider audience.

Or a more humorous and high-tech idea. Suppose that someone finds themselves in a noisy environment (dogs barking, cars horning, or kids crying), An app like AutoShazam could detect the high noise levels and a suggestion of a 3D-printable set of earplugs on pops-up on the screen of your smartphone, so that you can print them off and take a break (a mobile KitKat moment maybe?). Further ideas could be born by employing technologies such as ibeacon, or sensors.

PreExperience

What’s possible can be far wider than the limits of one’s core businesses. Imagine that you book a flight ticket only to receive a confirmation e-mail or e-ticket. But what if the flight company would allow you to create and then 3D print a custom luggage tag themed after your holiday? Or what if after booking online your hotel room for your much-awaited vacation, to have the ability to instantly 3D-print your QR coded key-card; the very same card that you will be using in few days’ time to enter your room. In both cases, a part of your future experience is already in your hands.

3D Maker Ecosystems

So, who can realize these ideas? The development of three-dimensional products is a whole new world for the digital marketing and advertising agencies. What is needed is 3D maker ecosystems, or 2-sided marketplaces bringing together marketers with 3D makers. Perhaps a cross between Pinshape, a marketplace for selling 3D objects and oDesk, a marketplace where companies hire freelancers to get the job done. Ecosystems connecting marketers with 3D makers would have superior growth economics and the same winner-takes-all effects that we have seen practiced by Android and iOS ecosystems.

Of course, many digital marketing agencies or Brands will opt to make their own 3D printable object libraries working with professional 3D artists or winners of 3D maker competitions. Digital marketing agencies can also partner with banks to make 3D printing available in more places. Just picture this for example. You buy with your credit card a new smartphone. Then your bank, as a nice promotional gift, offers you a series of 3D printable cases you can download and print. But hey, if you do not have a 3D printer, you can go to closest branch where a 3D-printing vending-machine, next to the ATM prints your case.

Putting a brand in your hand

3D-printing technology is a marketing tool for all kinds of brand, be it physical goods, software or services brands. It is a multidimensional tool, simply up to the marketers’ imagination to dream up the right application. Yet, be warned: 3D-printing and real-life tangible objects are two-edged swords. Make a gimmicky object and your brand suddenly looks uninspired and tacky, Come up with something imaginative and relevant to the here and now and you will thrive. That’s what puts your 3D campaign not only in people’s hands but also in their hearts.


About Alexandros Stasinopoulos

Alexandros is a multidisciplinary award-wining Design Manager with experience at the intersections of Design and Innovation Management. Currently, as Creative Director at the international Design & Innovation Consultancy Pilotfish B.V. in Taiwan, he is responsible for transforming visions and strategies to tangible products and services. Prior to this, he designed for Taiwanese companies as well as taught Design at Shih Chien University.
Alexandros holds a BA in Design from AKTO (Greece), a MA in Design from Domus Academy (Italy) and a Msc in Strategic & Product Design from TU Delft (The Netherlands).
For more information you can visit : www.ale.gr

Rise of the Mega SDK Vendors in Mobile

[A new SDK economy has sprung up to support the needs of the 500,000+ mobile developers and the app economy. Guest author Panos Papadopoulos reviews the growth and rapid consolidation of the SDK economy and the impending rise the Mega SDK vendors]

VMMegaVendors

Many would argue that the mobile platform consolidation in the form of today’s Apple / Google duopoly is a good thing for developers; less choice, but two mature platforms and a billion-smartphones addressable market. Despite the platform consolidation, developers face real challenges not just in developing, but also in prototyping, designing, marketing, selling and supporting apps.

The quality bar for apps is increasing; apps need to incorporate more functionality in a slicker UI, a sexier package (graphical assets and messaging), as well as through the right marketing channels and at the right price, which is usually free-to-try. App consumers are demanding, expecting utility, convenience and easy of use – all at a low or free price point with monetization shifting from paid downloads to advertising and in-app purchases. Enterprise apps have to talk to legacy systems, be an effective part of a company’s business strategy, enhance brand image, while being secure, reliable and cost efficient to develop and maintain. Continue reading Rise of the Mega SDK Vendors in Mobile

Connecting the next 5 billion users: Emerging markets and the need for new business models

[With so much excitement about smartphone growth, we often forget that the biggest opportunity still lies ahead, in connecting the next 5 billion smartphone users to Internet and apps. Guest author Tom Christian Gotschalksen talks about the idiosyncrasies of emerging markets, and the business model innovations that are needed to close the smartphone gap]

Business model innovations for connecting the next 5B users

Smartphone growth has taken the wireless market by storm, having exceeded the one billion mark back in October. The US and western European markets for smartphones are about to saturate, and with those also the related industries of apps, content and mobile Internet connectivity.

Now US carriers are looking for growth outside of US, and Internet heavyweights like Twitter, Google and Facebook are targeting emerging markets where the remaining five billion users are still to connect to apps and the Internet.

In Asia, Africa and Latin America there is a wave of new, aspiring digital natives. They are enabled by $50 smartphones, and the burgeoning second hand smartphone markets, creating a huge demand for Internet services, apps, games, and Internet connectivity.

But there are two important challenges in connecting the next 5 billion smartphone users to the Internet and apps. It’s the business models behind data and handset subsidies, which are in dire need of innovation. Continue reading Connecting the next 5 billion users: Emerging markets and the need for new business models

From Skyper to Passpoint: The Renaissance of Wi-Fi Innovation

[With WiFi being more than 10-years old, you might think that it’s become dated. Think again; in the last 2 years WiFi has seen a renaissance of innovation from numerous companies like DeviceScape, Instabridge, Karma, LIFX, Lockitron, Twine, WeFi, Wiman.me and many others. Guest author Niklas Agevik reviews the initiatives behind the resurgence of WiFi innovation and the reasons behind it].

VisionMobile - the Renaissance of Wi-Fi Innovation

Wi-Fi is now over 10 years old, but a new wave of innovation is leveraging those same technology foundations. Why? Firstly, the smartphone revolution has created 100 of millions of Wi-Fi endpoints. In addition, Wi-Fi has become too ubiquitous to ignore. It’s also unregulated enough to spur new use cases.

FON, a large Wi-Fi sharing community, announced last year that they have 7 million hotspots and the new 5th generation Wi-Fi routers (802.11ac) clock in at data speeds of over 1 Gb/s. Everything from VisualLight, a Wi-Fi enabled light bulb to hotspots for sharing Wi-Fi with strangers has appeared in just the last two years. Continue reading From Skyper to Passpoint: The Renaissance of Wi-Fi Innovation

Fashion Tech: how retailers are accelerating the app phenomenon

[Did you ever think that your mobile can be your remote control for shopping? It’s getting there. Guest author Zabetta Camilleri reviews how mobile apps are changing Fashion Retailing with brands such as Burberry, Forever21, Shopkick, Shopstyle, SalesGossip, Chanel,Tommy Hilfiger & Clotheshorse leading the way in mobile app innovation.]

There’s no doubt ‘Fashion Tech’ has become the latest buzzword in retail. The innovation we’ve seen in the Mobile apps space has already disrupted the age-old industry of fashion retail. Now we are witnessing some important trends that will continue to change the way we shop for fashion online as well as on the high street. Continue reading Fashion Tech: how retailers are accelerating the app phenomenon

WebRTC: a new game-changer, disrupting Telcos and OTTs

[Championed by Google, WebRTC allows browsers to make calls from your PC or phone – and it’s disupting both telcos and incumbent VoIP players, from Skype to Viber. Guest author Tsahi Levent-Levi discusses Google’s intentions and the trouble ahead for both telcos and OTT players.]

It’s been a tough couple of years for carriers (a.k.a. network operators) who have been fighting off competition from over-the-top (OTT) players such as Skype and WhatsApp, offering services such as voice and SMS over the carriers’ own networks. The impact of these OTT players has been astonishing – whether they’re nimble startups like Viber (with more than 90 million users, making over 1.5 billion calls a month and sending over 2 billion text messages), or large corporations such as Apple, whose iMessage  reaches 140 million users, sending 1 billion iMessages every day. Continue reading WebRTC: a new game-changer, disrupting Telcos and OTTs

Beyond Siri: Breaking down the Virtual Assistant market

[Helped by Apple’s successful launch of its Siri technology in 2011, voice-activated mobile virtual assistants (VAs) have crossed the chasm into mass-market deployments. Apple’s product triggered a wave of both imitation and innovation in the last year, including tens of smartphone applications. This was only for starters. Developers, speech recognition and AI vendors, telcos and handset manufacturers are now all working on bringing the next-generation VA to life.]

Read more about the evolution of virtual assistants from 1995 to 2015 in the full report (free download)

Continue reading Beyond Siri: Breaking down the Virtual Assistant market

[Report] Mobile Megatrends 2012

[Welcome to the new edition of our annual Mobile Megatrends report series. Megatrends 2012 analyses and interprets the nine most important trends of 2012, explaining how the software world is impacting the mobile business.]