The Internet of Things is finally here, permeating the consumer device market with gadgets like Amazon Alexa and Google Home. To consumers and vendors alike, it’s almost second nature to couple mega brands like Amazon, Google, and Apple with visions of cutting-edge, IoT technology.
This is the power of brand loyalty, or part of the reason why every other phone you see is made by Apple. Through extensive brand awareness, a history of solid products, and some good old marketing, these mega brands have achieved total market penetration, influencing current and future buying decisions for many of the tech products we use on a daily basis.
Despite the number of big brands already dipping their toes into the smart home market, this trend of staunch brand evangelism has yet to find its way into the Internet of Things market. A survey conducted by the Open Connectivity Foundation at CES 2017 revealed that brand loyalty is considered only “Somewhat Important” or “Not Very Important” by a majority of consumer respondents. In comparison, more than 60 percent of respondents considered standardization and interoperability when it came to their connected device purchasing decisions.
For an industry still in its infancy, the lack of brand attachment isn’t much of a surprise. As markets mature and evolve, new companies will rise and some of the incumbent will fall, especially in a tech industry built on the latest innovations. With many already speculating on the forthcoming king of IoT, it will be important to consider what exactly this means in the context of an interconnectivity-driven industry.
The Internet of Things is a unique phenomenon in the world of tech, which is usually competitively aggressive in the battle over market share. Similar to the cloud, which often features partnerships from competitors to boost user experiences, IoT relies on an interconnected ecosystem that supports interoperability beyond vendor or product barriers.
So, will brand loyalty be enough to dictate the direction of the market? Amid concerns of security and interoperability, the Internet of Things faces an uncertain future, one that may never be governed by a single ruler (and for good reason).
Passing Down the Brand Genes
Brand loyalty boils down to two things: brand reputation and a product’s ability to deliver. For a blooming industry like IoT, tech giants rely on the carry over effect of brand reputation to drive consumer interest in an otherwise immature and underdeveloped consumer market conscience. From there, a product is expected to deliver a polished, customer-focused experience. Without the fulfillment of both of these qualities, brand loyalty falters. For example, if Amazon Alexa ended up being subpar, Amazon’s existing reputation certainly wouldn’t exempt Alexa or Amazon from losing product and brand loyalty.
The problem also extends beyond a single product’s market reception. As IoT remains in its earliest stages, there has yet to be any brand that demonstrates that it deserves undying brand loyalty. A product like the iPhone has 10 years of product releases, reviews, and scrutiny to drive its reputation. In comparison, Amazon’s Alexa was released two years ago, and with limited capabilities and in one small sector of the incredibly broad IoT industry. For IoT, it is simply too early to tell what brands, if any, will develop and dominate the market.
Ultimately, the idea of market domination in the Internet of Things challenges the very core of an industry that depends on interconnectivity to function. Brand loyalty is a work in progress, simply because the market hasn’t evolved to where it can meet consumer expectations of a varied product market. Today’s digitally demanding customers are looking for solutions that are interoperable and provide product flexibility as the market grows.
A Push for Interoperability
With both consumer preferences and market trends pointing toward interoperability and standardization, the future of the IoT market may mean a connected, partner-based ecosystem that prioritizes device interoperability. Even if Apple, Google, or Amazon produced a line of superb vendor-specific products, the Internet of Things is too broad and too connected a market to support the success of vendor or product-lock in.
To advance the industry, it will be imperative for IoT device manufacturers to focus on collaboration to make devices work both cross-device and cross-manufacturer. A single dominant force can create barriers to interoperability and market progress as a whole. Connectivity will always remain a foundation of IoT, and the market must evolve to meet this growing need and ultimately provide the best service and products possible to the consumer.
About the author: John Park is executive director of the Open Connectivity Foundation (www.openconnectivity.org).
Edited by Ken Briodagh