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Many traditional product companies are adding digital features and services to their physical products. They are learning to benefit from the constant connectivity to their products and customers, e.g. by offering value added digital services and improving product quality based on field usage data. Some are even completely re-inventing their business models. And new market entrants are re-thinking the ways how business was done in the past with physical products, providing a digital-first, "as a service" offering.

AIoT Vision

The "Digital OEM" is emerging as a new role. At the core of the business model of the Digital OEM is the physical asset or product. An interesting question is which new opportunities arise through the combination of physical products with digital solutions. Examples include:

  • Data-driven business, e.g., building on user-generated data or asset/product performance-related data. Examples include usage-based car insurance (UBI), data-driven aftermarket services, or drone-based building facade inspection.
  • Digital add-on services, e.g., an optional autopilot service for an electric vehicle, or cooking recipe add-ons for a smart kitchen appliance
  • Asset-as-a-Service, e.g., car-seat-heating-as-a-service, or the famous "power-by-the-hour" for Rolls-Royce aircraft engines
  • Smart Maintenance, including predictive, preventive and prescriptive maintenance, enabled by deep analytics of asset/machine data via AIoT
WHY: Digital OEM Business Models

The Digital Playbook provides many examples for smart, connected products and how to implement them. A complete case study can be found here.