The connected object market today shows a real complementarity between the OTT and Telco players in terms of their current positionings, aligned with their core business. In the longer term, however, IDATE anticipates a fiercer competition, around the platforms and services which are set to be the next source of revenue.
The automotive market, around the connected car business, is key for internet giants and telcos. Competition today is on the platform side: cornerstone of the next connected car strategy for both telcos and internet giants. Looking further ahead, the main competitors will most likely be OTT service providers, as they will offer services by exploiting the data generated by sensors in the vehicle.
The wellness market is very recent. Telcos are absent from its value chain, with the exception of very limited volumes of cellular objects. They only focus on the distribution side, where the reselling business can grab a sale commission on wearable objects. OTT internet players are eying this promising consumer market for the opportunities it will offer in the near future to manipulate and monetise masses of personal data.
Figure 15: TIMEX business model evolution
The healthcare market is a specific market. For a long time, this very promising market has been in the growing numbers of potential ‘clients’ as their age increases. The key objectives of healthcare applications are to optimise the treatment of disease and to save costs for national healthcare services. Even though solutions will be provided in partnership with experts, both telcos and internet players will push platforms and services.
Figure 29: Main expertise areas for Orange Healthcare
The smart home market will be the arena for vast competition in the next few years. On the side of the OTT internet player, smart home applications are seen as a complementary way to follow their consumers/audience, even though they have different approaches. Competition – again, will be heavy – it will be on the platform and services side as all players aim to manage the data.
Figure 78: Smart home offering powered by WeChat Smart Device Platform
Today, the industrial internet market is considered as an extension of the industrial M2M business for telcos. The internet giants are notable by their absence, even though some could provide cloud-based tools: Google, and Amazon with their specific IoT AWS offering, are prime examples.
Analogous with traditional online services, the main threat for telcos is that they yet again become the pipe, and only the pipe. They have, however, anticipated the connectivity commodity threat by offering data platform solutions and related services. Before services, telcos have backed their core business, by setting their eyes on LPWA technologies or collaborating on cellular version (NB-IoT ahead). They are also backing the next 5G technologies, which aim to empower various verticals, including healthcare, manufacturing, smart cities and the automotive industry.
It will be a fierce battle, given that internet giants are global by definition. Moreover, compared with traditional Web services, the main difference is that internet giants manufacture their own objects, providing almost an end-to-end solution of product, platform and services on top. Faced with this kind of solution, traditional players in the industry will also suffer from the invasive nature of the OTT internet players and their fierce competition.