Intense competition and price pressure impact on profits in the consumer and enterprise device markets. Differentiation is difficult and an expensive exercise.
The Smart Ring is an emerging and yet unexploited wearable electronics segment – so the question is, how can brands and manufacturers use the Smart Ring to create a profitable and uncontested market – their own Blue Ocean?
In this article, Ville Ylläsjärvi, Product Innovator and Co-founder at Haltian, the global product development and IoT firm, and developer of several Smart Ring products, explains how brands, manufacturers, and service providers can define the right Smart Ring strategy.
Launch of a new era in the Smart Ring market
The first Smart Ring products entered the commercial consumer markets about five years ago. Since then, the Smart Ring space has been dominated by startup companies. The startup driven market has enabled rapid innovation, technology evolution, and product development. As a result, you can find several Smart Ring products in at least 11 product segments – these include health monitoring, fitness tracking, contactless payments, the panic button, and more.
Amazon’s launch of the Echo Loop Smart Ring in September, has however, marked the beginning of a new era for Smart Rings. The offering from one of the largest global consumer brands will help the Smart Ring enter into the mainstream market, and accelerate market growth. Apple’s Smart Ring patent application guarantees that other tech giants will follow suit.
Is Smart Ring ready for Widescale Innovation?
The Smart Ring form-factor has passed the initial acid test of commercial consumer markets with flying colors. Despite several market flops, a handful of companies have managed to create successful Smart Ring products – among these are the Oura health ring, the Motiv fitness tracking ring, and the Wave MIDI controller ring created by Genki Instruments.
The Smart Ring is light, unnoticeable, and a very personal wearable device. It sits tightly on a finger and doesn’t fall off easily, and it won’t disturb the user. The Smart Ring is a natural device for gesture control – as we use our hands and fingers all the time for communicating, steering, and for pointing at things. Our fingers provide a comfortable way to sense the heart rate for applications, such as health monitoring.
So, yes – the Smart Ring form-factor is ready for wide-scale innovation for brands, manufacturers, and service providers to create new Blue Ocean markets.
Smart Ring – The Ultimate Product Development Challenge!
Let’s face it; the Smart Ring is an ultimate product development challenge for any company. On a strategic level, you can choose between several go-to-market strategies; and then you will have to define the right product/market strategy and value model.
Technically, the Smart Ring is an ultra-demanding form-factor. It is tiny, yet packed with sensors, circuitry, a battery, and more with an ultra-high degree of integration – antenna design alone requires deep RF (radio frequency) know-how. Developers have to solve countless challenges before they can launch a Smart Ring product, which can deliver an extraordinary user experience.
Consequently, choosing the right product development strategy will be crucial – there are several alternatives, and each of them has its pros and cons.
Building a successful Smart Ring strategy depends on three primary areas: it is the product/market strategy, the value model, and the right product development strategy. I will now go into depth by delving into them in more detail.
Choose the Right Smart Ring Product/Market Strategy
The Smart Ring form-factor is a flexible product innovation platform, which can be designed, developed, and applied for a multitude of use-cases and markets. As with every company, you have to define your own strategy. These are four alternative paths you can take:
1. Create a New Smart Ring Category
Smart Rings have been successfully used for establishing several new product segments, which were not in existence before. These include, for instance, convenient sleep improvement, and health and fitness monitoring. However, there will be many more segments to be invented, for example, in the areas of remote medical care, personal authentication, ambient sensing, and even more —the only limit is your imagination!
2. Redefine an Existing Product
You can use the Smart Ring to redefine the utility and user-experience of your existing products or services delivered today. The Smart Ring can introduce deeper intelligence, higher security, and a further ease-of-use; into your products, and this can translate into higher customer value, or differentiation. The first-come-first-serve advantage is critical for success in this strategy – and typically, competitors will follow your lead quickly!
3. Develop a Physical Dimension for a Service
If you are a provider of an immaterial service, such as an online service, gaming, gambling, security and surveillance service, or an ecosystem provider, you can develop the Smart Ring to be the physical dimension for your service. This differentiation strategy could set you apart from your competitors by providing the buyers better security, easier authentication, or enable easy payment.
4. Develop a Vertical or Enterprise Application
According to a recent report by Gartner, by 2020, more than 60% of organizations will be using wearables for business purposes. You can already find several Smart Ring opportunities in verticals and enterprise segments. Some ideas include the monitoring of performance levels of employees through parameters such as keeping tabs on their heart rate, blood pressure, and skin temperature. Just imagine how useful it would be to assure that people on duty have the required physical and mental preparedness to carry out their tasks – this would include air carrier crew, taxi and bus drivers, field service technicians, emergency responders, public safety officers among others. Smart Rings could also improve worker safety by monitoring their health under challenging environments and sending out alerts, in case of emergencies.
Define the Best Value Model for your Smart Ring Product
The Smart Ring, like any other consumer electronics market, is highly price sensitive. How can you maximize the economic benefits in the Smart Ring market? This depends on the product and pricing strategy you will choose. Here are three alternatives to consider:
1. The one-off hardware pricing strategy is the simplest and straight-forward way to convert customer value into revenue. However, this is what everyone is doing today.
2. Instead of a one-off price, you can develop the Smart Ring to be an ecosystem like smartphones – and ensure that customers buy new applications and features for your ring.
3. If you are a service provider with a recurring pricing model, you could also capture the value of the Smart Ring through monthly service fees, instead of a one-off sale fee.
Choosing the Optimal Product Development Strategy is Crucial!
The Smart Ring is a highly demanding form-factor. It is the ultimate technical challenge for the developers. Choosing the right product development strategy is crucial for your success in the markets. Now I will share the three most common product development strategies and their pros and cons.
1. With in-house development – you can build up an internal organization and competence and invest in the resources required for developing your Smart Ring product. With this strategy, you have full control over the development process, and future product roadmap, and, if successful, you will sustain competitive advantage in the market. On the flip side, the Smart Ring industry is still new; so there is very little competence out there, and you might end up wasting a lot of time.
2. You can buy and rebrand a third-party white-label Smart Ring product, and enhance it with your own custom features. The white-label strategy is fast, and you save time in the beginning. However, the downside is that you will not have full control of the
product features, quality, data security, and roadmap.
3. You can also outsource the product design, development, and manufacturing to a high-end product development company who have prior experience in the Smart Ring market. This strategy provides you with a fast time-to-market with a well-designed, high-quality product, thanks to working with an experienced development team who can foresee and avoid problems. With a long-term partnership, you can develop a product customized for your needs, and plan your roadmap ahead. With this strategy, however, you will not accumulate all the technical competence assets in-house.
The Smart Ring is more than just a product. It is a versatile innovation platform that can help you to create new, unforeseen products, services, and user-experiences. It gives you the opportunity to redefine your existing products and services in a new way. The Smart Ring allows you to differentiate your offering and to deliver your customers an unprecedented utility and value – and create a profitable Blue Ocean market!