The age of co-innovation: IFA insights

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The show

IFA Show is broadly considered Europe’s largest Technology show. It is certainly the most consumer-friendly, with low ticket prices designed to encourage public attendance.

With 1,814 exhibitors and 161,200 square metres of sold-out show floor, IFA again confirmed its role as the leading showcase for the global technology industry.

Our immersion into the show revealed some key trends – some expected, some less so.

Leadership through co-innovation

No company can innovate without partners, alliances or open eco-systems.

It is the Age of Co-Innovation.

“IFA 2018 underlines the importance of combining ideas and technologies from numerous market sectors. Instead of one industry setting the pace, there are six industries simultaneously driving innovation forward”

Innovation is not confined to any one ‘home’ market. Technology-driven innovation is at it’s best when jumping industry barriers, finding new and previously unthought-of applications. The importance of using the available innovation in this way, in your marketplaces, cannot be over stated.

The lesson is simple – apply your technology or proposition to new verticals!

Emerging Virtual Distribution networks

Consumer insights are critical to operate efficiently, cut through hype and really understand what customers want. When buying online, the experience is the key, not the price alone. Price becomes a function of competition. Consumer experience is at the heart of success.

Predictions from industry analysts suggests retailers and brands alike will rely on ‘multi-format portfolios to capture future growth’ as markets enter post-modern retail periods at the end of this decade. Kickstarting a positive cycle, based on a multi-format consumer experience, is likely to prove critical for online retailers.

Acquisition of brands to sell is the simplest way. However, this flies in the face of accepted principles of streamlining a supply chain. Traditional distribution channels are increasingly risk adverse.

True Virtual Distribution is a new process that allows for risk free range extension and the beginning of a positive cycle. In it’s purest form, it allows retailers to range and sell almost any product without ever carrying a stock risk; products are bought/sold in the usual way but fulfilled directly, from manufacturer to consumer.

Virtual Distribution is the disposal of that traditional framework whilst retaining the relationship management skillset. The trick is in managing everything in-between the brand and the consumer – listing tools, real time stock availability, image management and data, information flow, invoice handling, credit risk. etc

It is, in essence, the supply of incremental brands, product lines and revenue to any online or hybrid organisation, without the associated costs.

If easier, it can also be viewed as the ‘API Economy for Goods’ rather than Services, and as such represents the future of distribution.

Strategies to Establish Ecosystem Dominance

Choosing a Smarthome Ecosystem, as a consumer, is not rocket science – it has simplified greatly over the last 12 months or so. The ‘Big 3’ all have solid offerings and advantages – Amazon has proliferation on its side, Google has the broadest ecosystem and huge momentum and Apple has that familiarity factor for users, plus great encryption.

The confusion around new devices such as fuel cells, electric car chargers and other Future Home compatibility is also fading. Where services are controlled directly by Utilities corporations, the back end interface will be there, but with devices controlling the front end accessible consumers. Similarly, carrier network supplied consumer devices (form Vodafone, for example) simply plug into your choice of mobile interface.

The competition is now on to control the upstream from the ecosystem – enablement through Router provision. Announced at IFA 2018 were the Amazon Alexa Routers, plus compatibility partnerships with Huawei and Netgear mesh routers. Previously announced Google Mesh routers are now becoming available on the market to very positive reviews. Uninterrupted internet coverage for an ecosystem is likely to result in loyalty or uptake of that system over the others. This will be a new area of competition for Amazon, Apple and Google over the coming 12 months.

Exponential growth in voice assistants continues

In line with IFAs opening press, much is being made of the power of co-operation as Google and Amazon fight it out through the ‘virtuous cycles’ using partner manufacturers. Both Google and Amazon clearly believe that Voice will be the key interface, especially with 5G around the corner.

Amazon’s keynote speech at IFA 2018 was delivered by Daniel Rausch, Amazon’s VP Smarthome. It concentrated exclusively on Alexa, from a conception inspired by Star Trek, up to and including the future. Rausch was careful to call out the benefits of operating with Amazon as a partner, with a 43% average uplift in business during the following nine months for any partner launching an Alexa-enabled device. Those that add Works with Alexa compatibility to an existing device saw a 53% rise in business.

Google was everywhere at IFA 2018 – the Home Max device, the opening announcement of the Wear OS updates, bi-lingual updates for Assistant and plenty of new partnership announcements.

Partner strategy is also key for Google, too. Since CES and I/O this year, the number of connected partner devices for Assistant has rocketed from 1,000 to over 5,000. Amazon may have 20,000+ partner devices, but momentum seems to be with Google. In addition, Google Assistant is everywhere, not just the home, providing access to a whole set of different ecosystems.

Robotics: Human interfaces are consolidating

Exoskeleton suits are not especially big news on their own. Hyundai designed one in 2015 aimed at improving the strength and durability of industrial workers while minimizing injuries.

Designed in collaboration with SG Robotics, the CLOi Suitbot is unique in that it effectively mimics natural human movement, but also in that it has LG’s artifical intelligence built in. This AI analyses biometric information and learns from user movement over time, adjusting to and providing better support for the user. As well as Healthcare, the mid-long term includes distribution and industrial use cases.

Mobile Enablers

As app capabilities are leaving current hardware sophistication behind, new enablers are being sought to drive further development.

The key enabler being chased currently is battery technology – longer life breakthrough’s are arriving via research at the likes of UCLA who have created a 3D battery architecture capable of producing micro batteries producing the same power as conventional lithium ion designs. Cornell meanwhile states that it is close to a breakthrough with instantly-recharge technology for 3D architecture – essentially providing a full charge in 5 seconds or less. Lithium Sulphur batteries are also under investigation, with Korean-led research using fibre and carbon nano-tube technology to create a foil-like form factor, aimed specifically at Sportswear technology.

An enabler in evidence at IFA this year is flexible screen technology, demonstrated most effectively by Chinese company Royole. Royole has been working on this since 2012, and has previously innovated with the curved-screen Moon personal cinema headset. The 0.1mm thick curved display technology has th power to supercharge the smart devices market in applications from consumer devices to transportation, fashion, sports and education. Royole won’t reveal if its working to enable mobile phone manufacturers also, but the Galaxy X is rumoured for MWC in 2019.

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