Wearables start-ups urged to forge open platforms, monetise data to thrive in IoT era
Start-ups that create wearables and other smart gadgets must develop open platforms and consider how to monetise the data they collect if they want to succeed in the emerging era of the Internet of Things and connected devices, according to experts.
Christina Bechhold, an investor with Samsung’s Global Innovation Centre, said companies developing IoT product can make money by selling hardware and opening up their data to developers.
“We like to see open platforms. These walled gardens, these closed platforms, are not ones that are going to win, in our view,” Bechhold said at the Launch Consumer IoT Summit hosted by locally-based IoT acceleratorBrinc.
“It’s the open platforms that are collecting data and sharing it with developers and consumers that are really interesting.”
The IoT refers to a network of connected gadgets, including wearables and smart devices, that can exchange data - “talk to each other” - using embedded sensors and software. The number of connected devices is expected to reach 30 billion by 2020.
Global market for IoT is predicted to hit US$1.7 trillion by 2020, up from US$665.8 billion in 2014, with devices taking 31.8 per cent of this, according to the International Data Corporation.
New York-based Bechhold said consumers increasingly want smart devices that can talk to each other to create intelligent systems, rather than single-use devices, and that developers must consider this when building their products.
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James Giancotti, chief executive officer of start-ups rating company Oddup, said it was important for IoT hardware start-ups to realise the value of the data they collect, which can be sold to big companies.
“A lot of them don’t see the data as a critical element, because remember, a hardware product is the important thing from a visual prospect, but the data is so much more important from a revenue and a profit perspective,” Giancotti said.
He pointed to Hong Kong start-up Ambi Climate, the developers of a device that combines with software to control air-conditioning units to maintain a comfortable room temperature, as a good example of a local hardware company with the potential to monetise its data.
Start-ups are seen as leading the way in IoT, with Gartner predicting 50 per cent of IoT solutions by 2017 will have been created by companies younger than three years old.
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The IoT is being touted as a potential growth area for start-ups in Hong Kong alongside financial technology firms.
Hong Kong is seen as a gateway to manufacturing in Shenzhen, in southern China’s Guangdong province, while providing legal protection for intellectual property rights and other issues that these companies need.
The city is set to get a second dedicated IoT accelerator in May.