State of Consumer IoT

All new technologies go though fits and starts cycles as they are introduced into the market place. It takes many attempts and different approaches and tenacity to bring new successful technology based products to teh market place. Consumer IoT is no different. At a time when some people thought there would be 100s of different consumer IoT products we are only seeing a few categories that can show any signs of success as far as sales volume. So what is the problem with consumer IoT?

In some cases we can point at technology weaknesses - chip, battery and application technology does not have quiet what is needed and we need to wait a Moore's law cycle or two before we have required product usability attributes. In other cases it is early entrants that establish initial product presence and then fail to pursue traditional market penetration strategies of lower price and differentiated product models. Google's Nest consumer IoT product lines are examples of this. Basically sitting at the same price point for five years thereby slowing down market penetration that lower prices and differentiation would have driven.

Finally, in some categories the leading initial provider does everything write by creating price differentiated offerings while seeing competitive products entering that expand the market further. This is certainly the case of fitness trackers where FitBit has done everything right and now dominate the segment. The problem here is that the market for fitness trackers is limited and there is only so much room for competitive products, especially where product attributes are difficult to distinguish and the leading provider may just have a better IoT product and associated applications universe. This article from endgadget.com describes the shakeout that is taking place in the fitness tracker and wearables market place right now.

What we are seeing is how consumer IoT follows the typical patterns of new consumer market categories where initial entrants go after specific segments followed by shakeouts of these segments allowing for leading brands to develop. What we are not seeing right now is enough new categories being created or new players going after entrenched players. However, that will happen over times. After all, it took a couple of attempts, and the invention of the Internet, before Personal Computers became a successful consumer product.