Creating a Profitable Smart Ring – Here’s How To Do It
Commoditization is a universal challenge in consumer and enterprise markets. Intense competition and price pressure are hitting the profits. Differentiation in cutthroat Red Ocean markets is ever more difficult, and costly. The Smart Ring is an emerging, and yet an unexploited innovation platform – but, how can companies use the Smart Ring to create a Blue Ocean – a profitable and uncontested market?
In this article, Ville Ylläsjärvi, the CXO of Haltian, the global product development firm, and maker of several Smart Ring products, explains how brands, manufacturers, and service providers can define their Blue Ocean strategy!
Beginning of a new era in the Smart Ring market
The first Smart Ring products entered the commercial consumer markets approximately five years ago. Since then, the Smart Ring space has been dominated by startup companies. The startup driven market has enabled rapid innovation, technology evolution, and product development. As a result, you can find several Smart Ring products in at least eleven product segments – health monitoring, fitness tracking, contactless payments, panic button, and more.
The Amazon’s launch of Echo Loop Smart Ring on the 25th of September in 2019, however, marked the beginning of a new era for Smart Rings. The offering from one of the largest global consumer brands will make the Smart Ring mainstream, and accelerate the market growth. Apple’s Smart Ring patent application suggests that more tech giants will follow suit.
Is Smart Ring ready for Wide-scale Innovation?
The Smart Ring form-factor has passed the first acid test of the commercial consumer markets with flying colors. Despite several market-flops, several companies have managed to create successful Smart Ring products – the Oura health ring, Motiv fitness tracking ring, and the Wave MIDI-controller ring by Genki Instruments among the many.
The Smart Ring is light, unnoticeable, and a very personal wearable device. It sits tightly on a finger and doesn’t fall off easily, and it won’t disturb the user. The Smart Ring is the most natural device for gesture control – as we use our hands and fingers all the time for communicating, steering, and for pointing at things. Our fingers provide a comfortable way to sense the heart rate for applications such as health monitoring.
So, yes – the Smart Ring form-factor is ready for wide-scale innovation for brands, manufacturers, and service providers to create new Blue Ocean markets.
Smart Ring – The Ultimate Product Development Challenge!
Face it; the Smart Ring is an ultimate product development challenge for any company. On a strategic level, you can choose between several go-to-market strategies; you will have to define the right product/market strategy and value model.
Technically, the Smart Ring is an ultra-demanding form-factor. It is tiny, yet packed with sensors, circuitry, a battery, and more with an ultra-high degree of integration. Developers have to solve countless challenges before they can launch a Smart Ring product, which delivers an extraordinary user experience.
Consequently, choosing the right product development strategy will be crucial – there are several alternatives, and each of them has its pros and cons.
Building a successful Smart Ring strategy comes down to three primary areas: product/market strategy, value model, and product development strategy. I will now run them through more in detail.
Choose the Right Smart Ring Product/Market Strategy
The Smart Ring form-factor is a flexible product innovation platform, which can be designed, developed, and applied for a multitude of use-cases and markets. As with every company, you have to define your own strategy. Here are four alternative paths you can take:
1. Create a New Smart Ring Category
Smart Rings have been successfully used for establishing several new product segments, which were not in existence before. These include, for instance, convenient sleep improvement, and health and fitness monitoring. However, there will be many more segments to be invented, for example, in the areas of remote medical care, personal authentication, ambient sensing, and even more —the only limit is your imagination!
2. Redefine an Existing Product
You can use the Smart Ring to redefine the utility and user-experience your existing products or services deliver today. Smart Ring can introduce more intelligence, higher security, further ease-of-use, into your products, and thereby translate into higher customer value, or differentiation. The first-mover advantage is critical for success in this strategy – typically, the competitors will follow quickly!
3. Develop a Physical Dimension for a Service
If you are a provider of an immaterial service, such as an online service, gaming, gambling, security and surveillance service, or an ecosystem provider, you can develop the Smart Ring a physical dimension for your service. This differentiation strategy could set you apart from your competitors by providing better security, easier authentication, or an easy payment.
4. Develop a Vertical or Enterprise Application
According to Gartner, by 2020, more than 60% of organizations will be using wearables for business purposes. You can find several Smart Ring opportunities in verticals and enterprise segments. Here are some ideas: monitoring the performance level of employees through parameters such as their heart rate, blood pressure, and skin temperature. Just imagine how easy it would be to ensure that people on duty would have the required physical and mental preparedness to carry out their tasks – this would include air carrier crew, taxi and bus drivers, field service technicians, emergency responders, and public safety officers among others. Smart Rings could also improve worker safety by monitor their health under challenging environments and sending out alerts, in case of emergencies.
Define the Best Value Model for your Smart Ring Product
The Smart Ring, like any other consumer electronics market, is highly price-sensitive. How can you maximize the economic benefits in the Smart Ring market? This will depend on the product and pricing strategy you will choose. Here are three alternatives to consider:
1. The one-off hardware pricing strategy is the simplest and straightforward way to convert customer value into revenue. However, this is what everyone is doing today!
2. Instead of a one-off price, you can consider the Smart Ring as an ecosystem like smartphones are – buy new applications and features for your ring!
3. If you are a service provider with a recurring pricing model, you could also capture the value of the Smart Ring through monthly service fees, instead of a one-off sale fee.
Choosing the Optimal Product Development Strategy is Crucial!
Smart Ring is a highly demanding form factor. Technically, it is the ultimate challenge for the developers! Choosing the right product development strategy will be crucial for your success in the markets. Now I will describe the three most common product development strategies and their pros and cons.
1. In-house Development – you can build up an internal organization and competence and invest in the resources required for developing the Smart Ring product. With this strategy, you gain full control over the development process, and future product roadmap, and, if successful, you can sustain a competitive advantage in the market. On the flip side, the Smart Ring industry is still new; so there is very little competence out there, and you will probably end up wasting a lot of time.
2. You can buy and rebrand a third-party white-label Smart Ring product, and enhance it with your own custom features. The white-label strategy is fast, and you save time in the beginning. However, the downside is that you will not get full control of the
product features, quality, data security, and roadmap.
3. You can also outsource the product design, development, and manufacturing to a high-end product development company who have prior experience in the Smart Ring market. This strategy provides you with a fast time to the market with a well-designed, high-quality product, thanks to working with an experienced development team who can foresee and avoid problems. With a long-term partnership, you can develop a product customized for your needs, and plan your roadmap ahead. With this strategy, however, you will not accumulate the competence assets.
In Conclusion
The Smart Ring is more than just a product. It is a versatile innovation platform that can help you to create new, unforeseen products, services, and user experiences. It enables you to redefine your existing products and services in a new way. The Smart Ring allows you to differentiate your offering and to deliver your customers an unprecedented utility and value – and, to create a profitable Blue Ocean market!