Instrumented Interconnecteds Intelligent
January, 5th 2011
10:47
 

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Bruce Anderson

Editor’s note: The following is a guest post from Bruce Anderson, General Manager, IBM Global Electronics Industry

As I head out to the annual Consumer Electronics Show in Las Vegas, it occurs to me that a more apt name for this mega–event would be the Consumer “Experience” Show.

In the midst of commoditization pressures, heightened consumer expectations and ongoing digital convergence, Consumer Electronics (CE) companies need to take a long look in the mirror and ask themselves what business are they really in?

After all, today it’s not just about selling cameras it’s about the business of creating and sharing memories. And it’s not just about selling mp3 players – it’s about a personalized music experience.

And while TVs of all sorts will be on display at CES, it’s no longer just about selling TVs. It’s about providing a personalized entertainment and shopping experience — TVs that can not only display Internet content, but also tailored, targeted advertising and the realtime ability to purchase items.

And this “experience” theme isn’t limited to the entertainment realm. It’s making its way into other areas such as the laundry room where the focus isn’t just on washing machines that can run when energy prices are lowest, it’s on communicating how much consumers are able to save. And it’s not just about dryers that can call for service before they break down, it’s about making sure that the serviceman shows up at the house to fix the dryer. It’s about giving consumers a way to be eco-friendly and simplify their lives.

CE manufacturers realize they need to be part of a new ecosystem wrapping a great experience around their products, and they need to find ways to monetize the consumer experience, not just the device.  Consequently they are moving away from a business model focused on hardware to one based on complete solutions and services. A move from engineering-driven product development, to one that garners user insights and analytics to drive product innovation.

We’re seeing the move from “point” products with simple functionality to products that are connected to large ecosystems, using sophisticated, embedded and secure software. We’re seeing shifts away from vertically integrated supply chains, and from a winner takes all approach to an ecosystem based on mutual sharing of risk and reward.

This is our new reality…and at the heart of this new reality is the shift from selling pure products to selling products and services to create new value.  What business are you in?

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1 Comment
 
January 5, 2011
11:52 am

This may seem slightly off topic, but this article brings something to mind.

I find this fascinating. One thing I’ve always thought to be true is that we’re moving from having more individual products that complete some task, to having less products that each complete more tasks. It seems the trend will end up with several simple devices that complete many of the complex tasks we desire. Obvious example: ipod + cell phone + computer + camera = iphone.


Posted by: Jim
 
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