LIVE FROM MOBILE WORLD CONGRESS SHANGHAI: Despite moving into the so-called Internet of Things (IoT) era, individual devices and components remain isolated, with intelligent equipment not interconnected and information islands created.
“Although we talk about the boom in IoT, actually we’re not as connected as we thought we are,” warned Zhang Chunhui, president of Alibaba’s OS business.
The problem is that most companies continue to lack a true customer-centric view.
He gave the example of a friend who lost the fob (key) to his luxury car and was told it would cost CNY5,000 ($750) to replace and he’d have to wait 30 days as a security chip had to be imported. But the new fob didn’t actually solve his security problem, because he also had to replace the locks.
The fob is promoted as a ‘smart’ security feature, but in this case the replacement process was far from ‘smart’. “The intelligent equipment doesn’t connect to each other,” he said.
The Alibaba exec said this example illustrates how firms still operate on traditional business models, which often don’t add value to customers. “People need the right service at the right time and right place, which creates value for them. They won’t pay a premium just to have ‘smart’ products.”
The barriers to entry for startups are also still very high, with an extremely long value chain, he noted.
Zhang is bullish on the e-commerce giant’s software platform YunOS, which it developed five years ago. He said it’s the number three OS in China and its goal is to have 100 million users.
Meanwhile, he said he still has a lot of confidence in the smartphone market and expects growth to pick up.