How wearable technology impacts business models
Smartwatches may look good on your wrist, but how well do they fit with your business? Over Christmas I looked into some of the latest smartwatches and wearables. There has been excitement over the recent launch of wearables that include voice calling capabilities (using VoLTE), and a lot of discussion about how best to monetize the value they bring. I decided to take a look at it from a telecom marketing point of view.
Different business approaches for wearable technology
Operators have choices to make over how they fit these wearables into their brand positioning and what business models they use. The obvious approach is to bundle a high-value smartwatch with a high-end smartphone and charge an extra premium for the additional capabilities. This can be very successful both as a "luxury" offer and also to position a brand as a technology leader.
But as more wearables are launched with voice calling and other operator services, operators may also want a more affordable offer, while still monetizing the value added by the new features. Family plans, which cover phones and tablets for the whole family, can be a good way to do this. The smartwatch fits neatly into this as another device, with premium pricing for the new voice calling capabilities but using data from the family pool.
Another business approach is to use analytics to select your most valuable or loyal customers, and use wearables to further excite them, for example offering a free smartwatch instead of a phone upgrade, and monetise with premium usage charges for the new operator services.
In the future, we can even expect an opportunity for high-value partnerships with some important worldwide brands. Consider a major jewelry company that decides to introduce its own smartwatch. They may be willing to pay well for use of the network as a white-label, hiding your brand from the user and enabling their brand to be the only one the user sees. Particularly if the deal includes access to analytics and data.
Of course, these new monetization strategies all require new capabilities in the underlying BSS systems. Not just on charging and billing itself but, very importantly, much more flexibility in the rapid creation of new business models and the associated business rules (including rules on upgrading or switching packages).
These new wearables business models will also require a new, dedicated and up-to-date user experience for activating and paying for the wearable's usage, as well as marketing analytics to drive promotions. And for deals with partners, external APIs for access to analytics and user data and new capabilities in contract management and on-boarding.
Please let us know if you would like to discuss these ideas further with one of our experts.
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