Potentials and challenges of Smart Products and related business models

Abstract

Smart products are increasingly penetrating the market. They extend cyber-physical systems with Internet-based services and thus enable customer-specific adaptations and updates of products in the field. For industrial companies, smart product offering bear the potential to expand their product portfolios and increase their sales. In this article, the results of a survey among German engineers are presented that evaluated the actual state of adoption and future expectations regarding smart products in German industrial companies. The results show that the majority of German companies have recognized the potentials of smart products and also introduced such offerings in their portfolio. In this context, it is also expected that the product-related usage data will lead to a more individual communication with the customer. On the other hand, there is a high degree of uncertainty among companies regarding the adaptation of new business models, cooperation with an increasing number of partners, data management and the necessary technological infrastructure. These uncertainties can result in companies leaving potentials unexploited and opening up opportunities for new market participants. In summary, there seems to be a remaining gap between the willingness to abandon traditional business models and the expectations and strategies for future value creation.