The Internet of Things (IoT) topic is hot, and it is the most popular trend nowadays. You may think that there are no products in the world that do not need to be implemented by the Internet of Things.
However, just because some things are done, it does not mean that you should do so. Of course, the potential value proposition of the Internet of Things is quite large. It can drive the establishment of new companies, improve efficiency, and create new value propositions for companies with mature products. But sometimes it should be considered that the Internet of Things may not be of commercial significance at all.
Would you like an IoT coffee cup? No way!
Value proposition is not yet in place
Take a bad value proposition as an example: We can create an IoT solution for a coffee cup that detects how much coffee is left in the cup and the temperature of the beverage in the cup. The coffee cup also senses the location, and the data can be wirelessly transmitted to the cloud system to connect to other network or server sources.
On the server side, the location and status of the coffee cup (capacity, temperature) can be combined with other GPS data to connect the coffee cup to the nearest service provider, allowing them to provide you with more coffee. It also triggers the management service, sets the delivery message to the smartphone app to remind the location of the cup and the hot coffee! This is Uber Coffee Mug.
Very ridiculous premise, right? Of course, you can build this coffee cup - technically not a problem. But it is unlikely that there will be enough value to support the development of this product. There are countless examples like this, and there are even many investments that focus on products that are questionable in their value.
Cost/benefit is not attractive
Devices with IoT capabilities (and solutions) are of course costly. Despite the ever-decreasing cost of hardware components, the bill of materials (BOM) continues to increase. In addition, the cost and time required to build an IoT solution is significant, but it is often underestimated. A successful IoT solution requires hardware technology and integration, as well as a large number of software development and data analysis professionals.
If a company wants to make such an investment, approves the increased cost of the product, can it provide enough value for the user to ensure the price rises? Does the solution have enough headroom to allow the company to balance the considerable cost and time required to build the solution? Is the risk of exposure-reward ratio high? This requires an in-depth understanding of market opportunities and all value propositions.
Not ready to import new business models yet
Let's go back to the Uber Coffee Mug example. We can treat the nearby coffee shop as a company, so it can find a new value position on this smart coffee cup. The way to take advantage of this value can be to allow guests to pay for a monthly subscription, so the café will be able to serve coffee at any time during business hours.
but. Is the coffee shop ready to accept such a new business model? Ready to hire someone to manage the delivery service? Will there be a "company" to accept that coffee is not a cup of glass, but a monthly fee for the "unlimited drink" mode?
Of course, this example is very interesting. But think about a large company that sells retail consumer goods. Its traditional source of income is the sale of individual products through distribution channels. So, if revenue does not come from individual products, but from subscription payments? Subscribers can get devices and apps and services for free for a monthly fee.
For example, a company can get a subscription fee of $10 per month from each subscriber instead of selling a device for $150. However, direct sales and channel sales personnel receive compensation based on unit sales. But some may not be able to accept or manage subscription revenues, or even the technical skills needed to design and manufacture IoT solutions, but the right consulting partners will help achieve the goals. There are a number of options available for consideration, and there is no one-size-fits-all answer.
The target is too far, insufficient funds
Many companies don't recognize how much they have to spend to achieve a ambitious IoT solution goal. Of course, a small startup with only a few people may invest in human assets for a period of time, but few companies can last so long, 18 months? Or 2 years? The new company's team may lack all the skills needed to implement a complete solution, or it may not have enough resources to develop a partnership that will help it fill the gap.
The IoT solution should look simple and generous. Everyone can achieve this. However, as people who have continued to develop hardware-software systems for many years understand, the development of new products is quite complex and there are no standards to follow. The more elements in the solution, the more chances of an error. Products that implement IoT functionality not only burn money but are time-consuming and time-consuming, and not necessarily have solutions available.
Therefore, there is still much to think about before I move into the IoT design. Of course, there are indeed many new product categories and value-added products that can be used to enhance smart connectivity. It is important to carefully consider the relevant factors for successfully building an IoT development project. The cost of having to make a mistake can be high, but the rewards you can get for the goal are equally impressive.
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