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The importance of partnerships for the smart home market – the example of Drop and Bosch

The recent Beecham Research study, Smart Home Report 2016: Current Status, Consumption Trends and Future Directions, has explored current business models being adopted in the smart home market. That analysis highlighted the importance of partnerships in the definition of potentially successful business models. There have been several partnerships in the smart home market.

Here, we want to highlight an interesting one that brings together an innovative start-up such as Drop, an Irish smart kitchen scale company, and German industrial internet player, Bosch.

Bosch creating a platform for new ideas through partnerships

In order to set the scene, it is important to highlight Bosch strong commitment towards smart home and more generally, the smart home segment. Bosch is working together with another industrial giant, GE, for establishing an open-source platform for companies that wants to design and deploy IoT solutions.

The aim is to bring together parts of GE’s Predix and Bosch’s IoT Suite in order to cover functionalities such as messaging and authentication in an open manner. That openness should drive the development of an ecosystem of players able to transform ideas into applications using the GE-Bosch IoT platform.

Drop and Bosch for smart kitchen

Drop is amongst the first companies to benefit from this alliance creating a partnership with Bosch, announced at IFA 2016 in Berlin. Drop offers a smart kitchen scale, which connects to a tablet or to a smartphone and while it performs the same functionality of an old scale. It also offers a number of enhanced capabilities such as a recipe book.

Customers can consult the recipe book, but they can also enrich the recipe book with their own recipes. Additionally, for each recipe, there are also step by step instructions with a convenient graphic display to make the process of cooking easier. Thus, the likely buyer of this device are consumers that like to spent time in the kitchen and like to experiment new cuisine.

On the other hand of the partnership, Bosch has started introducing IoT capabilities – connectivity and data visualisation – to its white goods such as oven, microwave, washing machine, dishwasher and fridge transforming them into connected devices. Consumers remotely manage and control connected white-good through a single application.

The benefits of drop and bosch partnership

For Bosch, the next step is exploring the connectedness and the data richness of the smart white-goods in order to offer new applications to user. Drop is an example of a start-up able to offer applications on top of a Bosch smart kitchen.

For example, the user of the Drop application will be able to check the contents of their Bosch fridge and to know at the time of the shopping which ingredients are missing for the meal that they plan to cook. Furthermore, Drop application could have your Bosch oven pre-heat to the temperature you need for a recipe, and turn off right when the meal is done.

Additionally, what it provides both manufactures are a mutual cross loyal consumers sale. For instance, if somebody already uses a Drop Smart Kitchen Scale and plan to renovate their kitchen or replace their appliances these extra benefits might just result in consumer choosing Bosch products over its competitors.

Initial purchase of Drop could have been just to try a latest gadget at affordable price while satisfaction with it and interest to enhance experience can be an incentive to a bigger investment. Similarly, Bosch existing large customer base can get interested in acquiring Drop product.

Lessons to learn

There are two key lessons to take away from the collaboration between Drop and Bosch. The first one regards the essential role of partnerships. The Drop and Bosch story is a good example on how smart home product providers of a different size can mutually benefit from partnerships as well provide additional incentive for consumers for smart home adoption.

Those partnerships can about in a traditional form of collaboration between two organisations, but, they are increasingly flourishing in forms of ecosystem of players. And, the open innovation model can strongly enable that phenomenon.

The story also stresses the fact that a smart home device is useful if it engages with home owners’ needs and desires. This engagement can only be done through relevant content, relevant applications, and relevant use of the data gathered. Therefore, the smart home device should be the result of a multidisciplinary effort. And, multidisciplinarity comes only to life via collaboration. The IoT, and the smart home as a segment of it, will evolve because of partnerships. Without partnerships, we will not have the IoT!

The author of this blog is Olena Kaplan, senior analyst at Beecham Research.

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