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Digital smart products leads to new business models

Published: 26 June 2012

Professor Lennart Karlsson and researchers John Lindstrom and Magnus Löfstrand at Computer Aided Design and VINNEXC Faste Laboratory got their article "Goodbye to the industrial age" published in the latest edition of Ericsson Business Review (see link below). They write about how the digital revolution opens up new opportunities to manufacture, distribute and consume products.

Concepts such as "functional products" and "smart products" is something we will be more and more aware of as physical products are integrated with software and related services. Instead of selling a physical product, companies can sell its function, which leads to new business models where companies can start charging for "soft" elements such as services and knowledge. For example, a customer may purchase engine power to his car for an hour forward. The move to selling the function instead of the product comes with a lot of challenges, which is something the authors address in their article.