New white paper evaluates paths to profitability in the consumer IoT market
Parks Associates today announced a new white paper, Consumer IoT Product Development: Managing Costs, Optimizing Revenues, which provides companies with a business-planning blueprint to evaluate how a consumer IoT solution will perform across its lifetime. Subscription services, such as video storage and professional monitoring, can be critical for covering ongoing cloud and support costs. Seventy-one percent of video doorbell owners pay a recurring fee for service, which may include alerts/remote monitoring, video storage, and/or professional monitoring. The service attach rate for smart cameras is slightly lower at 66%.
Developed in partnership with Cardinal Peak, the white paper highlights pain points in the product development process, shares strategies for minimizing costs, and identifies primary monetization models in the smart home that can produce value for customers and other ecosystem players.
“Smart home providers employ various strategies to generate value and reach profitability,” said Jennifer Kent, Vice President, Research, Parks Associates. “This involves looking beyond the initial sale to produce long-term revenue streams through subscriptions, cross-selling and upselling, and multi-sided value propositions that leverage the value of the data and benefit multiple stakeholders.”
Beyond revenue generation, the data generated by connected product lines can offer strategic value to the organization. Smart products create an ongoing connection between the brand and the user and so provide a wealth of insight into how customers use the products, who uses the products, and what features are most popular. Learning how users integrate the product with others in the ecosystem can set up strategic partnerships for marketing, bundles, or distribution deals.
“As companies seek long-term value and revenue from smart home devices, they must weigh the advantages and risks associated with their development strategies, and benefits offered by different types of partners,” Kent said. “Each strategic approach offers unique benefits and challenges, and understanding these is critical to building a sustainable business model.”
To schedule an interview with an analyst or to request specific data, please contact Mindi Sue Sternblitz-Rubenstein at mindi.sue@parksassociates.com or 972-490-1113.
About Parks Associates
Parks Associates is a global research, consulting, and marketing firm with 40 years of experience delivering proprietary consumer data and industry insights for businesses. The firm produces market research reports, forecasts, surveys, and competitive business intelligence on connected consumer, small business, and commercial technologies and related business solutions. A woman-owned and woman-led company, Parks Associates is a trusted partner and advisor to executives, providing custom research, strategic consulting, and forward-looking analysis across smart home, small business, and commercial markets, including security, broadband, entertainment, energy, multifamily, smart buildings, connected health, and emerging AI-driven technologies.
Parks Associates supports industry growth through proprietary research, consulting, and executive networking and convenes thousands of leaders each year through its flagship conferences, including CONNECTIONS™, Connected Health Summit, Smart Energy Summit, Smart Spaces, and Future of Video. Learn more at https://www.parksassociates.com.
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