The Real Takeaway
- Demand is accelerating: Connected product adoption has grown 15% since 2000 and is projected to grow another 14% by 2027.
- AI is the universal priority: Manufacturers and users agree AI/ML will drive the next wave of smart capabilities.
- Interoperability requires clearer communication: Manufacturers think products connect well, users often don't realize what's possible.
- User experience must improve: Simpler interfaces, transparency, and personalization will drive adoption.
- Data and monetization go hand in hand: Stronger data strategy enables better products and new subscription‑based revenue models.
Consumer and commercial demand for connected products continues to climb. Since 2000, demand has risen 15%, and projections from IoT Analytics GmbH indicate another 14% growth by 2027. Features once considered premium—remote control, monitoring, or smart automation—are now basic expectations. For manufacturers, this presents a time-sensitive opportunity to expand capabilities, differentiate, and unlock new revenue streams.
To better understand where the market is headed, Perficient surveyed more than 1,300 manufacturers, commercial users, and consumers of connected products. Their responses uncovered both shared priorities and important gaps—insights that manufacturers can use to refine strategy, product experience, and long-term planning. Below is a look at some of the most compelling findings.
Where Manufacturers and Users Align: AI & ML
Across every respondent group—manufacturers, consumers, and commercial users—AI and machine learning emerged as the most universally valued technological advancement. All three segments see AI and ML shaping the next era of connected capabilities, particularly in:
- Healthcare automation
- Home automation and monitoring
- Automotive automation, diagnostics, and convenience
The possibilities extend far beyond today’s smart thermostats or remote-start vehicles. Think: an onboard chatbot that calculates your estimated gas budget for a road trip using your vehicle’s mileage, route data, regional fuel prices, and efficiency trends. These types of intelligent, contextual interactions are quickly becoming part of consumer expectations.
A Surprising Disconnect: Interoperability Perception
One of the most revealing gaps in the survey appeared around interoperability—how well-connected products integrate within an ecosystem.
- Manufacturers: Very confident their products connect “well” or “very well.”
- End users: Much more likely to say products connect only “somewhat well.”
This discrepancy suggests a perception and communication gap, not necessarily a technical one.
Our leading hypothesis:
Consumers may not always understand the connected features already available to them. If end users are unaware of what devices can do, they’re less likely to adopt, use, or upgrade connected systems—making the perceived value of new features or new versions feel “not worth it.”
This insight reinforces the importance of not only improving interoperability but also improving how its benefits are communicated and experienced.
Implications for Connected Product Strategy
These findings highlight the need for manufacturers to reassess:
- Which innovations truly matter to users
- Whether data is being collected and used strategically
- How product experiences could be improved
- Where new business models could drive revenue
Improvement across these areas can help manufacturers strengthen market position while meeting rising customer expectations.
Opportunity 1: Enhance Product Experience
Consumers increasingly expect more intuitive, transparent, and personalized interactions. Companion apps are an effective way to:
- Simplify customization and settings
- Provide remote monitoring for safety and convenience
- Deliver real-time alerts (fire, carbon monoxide, air quality, open doors/windows, etc.)
- Offer proactive maintenance suggestions
A more seamless experience can deepen user engagement and increase long-term satisfaction.
Opportunity 2: Strengthen Data Strategy
Connected products generate an enormous amount of actionable data—but many manufacturers aren’t yet maximizing it.
For example, automotive OEMs can create cloud-agnostic data processing platforms to analyze telemetry data, understand driver behavior trends, diagnose mechanical performance issues, and identify design improvements. Better data strategy helps manufacturers:
- Improve product quality
- Detect problems earlier
- Build stronger customer trust
- Inform investment in next-generation features
Opportunity 3: Unlock New Revenue Models
As data strategy and digital interfaces mature, manufacturers can explore new recurring revenue models. A common approach is:
- Offering essential features for free, ensuring broad accessibility
- Providing advanced features through subscription-based upgrades, such as premium automation, enhanced monitoring, advanced analytics, or personalized recommendations
This approach boosts customer retention while generating predictable revenue and supporting ongoing innovation. Manufacturers that design connected experiences around what buyers truly value will accelerate adoption and build lasting trust.
Explore how Perficient helps organizations in the Automotive and Industrial Manufacturing industry transform their business.