16:45 25 April 2017
The era of the smart, connected home has finally arrived and has generated enormous enthusiasm both among consumers and providers. This has lead to the introduction of a range of traditional and non-traditional business models that aim to address varying needs.
Although the well-established model of hardware sales is expected to always play a role in the connected home, it is more likely to become a less tantalizing prospect as the market matures and competition becomes fierce in the near future. Many modern consumers are now taking advantage of pay monthly subscription services. According to a recent Gartner survey, more than 59per cent of US households with a home monitoring solution pay a monthly fee. Meanwhile, telco providers and utility providers across Europe have successfully established new models by supplying a smart home gateway, apps and compatible devices on a 24-month contract basis.
However, companies that are charging for subscriptions face new challenges as several home automation services are now being offered to consumers free of charge. Pay as you go models are also starting to gain following with many businesses offering consumers exciting bundling opportunities and convenience. An example is a German utility provider that offers a six-month smart home packages wrapping in an app, gateway, and hardware that consumers find appealing due to its simplified billing.
Overall, it is fair to say that the exciting part of new and innovative business model generation is only just beginning and that the next few years will see business models offering more innovative options to consumers.