Manufacturers are embracing smart and connected products by 2020, Capgemini finds
A recent report released by the French professional services company, Capgemini, estimates that the connected products market will reach $519bn-$685bn by 2020.
The report, released by Capgemini’s Digital Transformation Institute, found that manufacturers estimate that 50% of their products will be smart and connected by 2020.
The “Digital engineering: The new growth engine for discrete manufacturers” report claims to evaluate manufactruers on two factors.
“This research examines how manufacturers are balancing two priorities: using digital to get legacy products to market quicker while investing in new smart products to capitalize on the servitization opportunity (deriving revenues from services),” the report claims.
From the manufacturers surveyed, 18% have intentions to stop manufacturing physical products altogether.
However, two-in-three manufacturers acknowledge that they are torn between sustaining and growing their core business while finding new sources of revenue growth from connected products.
In regards to innovation and engineering transformation, only 21% would be considered at an advanced stage.
Almost one third of the manufactures remaining at the pilot stage of the transformation.
“Digital technologies are reshaping the manufacturing landscape. Product-based business models are being disrupted by service-based business model, new skills are needed in a world of smart products, and innovation success depends on the effectiveness of a company’s open ecosystem,” the report reads.