Smart, connected products are products, assets and other things embedded with processors, sensors, software and connectivity that allow to be exchanged between the product and its environment, manufacturer, operator / user, and other products and systems. Connectivity also enables some capabilities of the product to exist outside the physical device, which is known as the cloud product. The data collected from these products can be analyzed to inform decision-making, to enable operational efficiencies and to continuously improve the performance of the product.
Smart, connected products have three primary components; physical, smart, and connectivity. In Professor Michael Porter’s and James Heppelmann’s Harvard Business Review article, “How Smart, Connected Products Are Transforming Competition,” they describe the three components as:
- Physical – made up of the product ‘s mechanical and electrical parts.
- Smart – made up of sensors , microprocessors, data storage, controls, software, and an embedded operating system with an enhanced user interface.
- Connectivity – made up of ports, antennae, and protocols Enabling wired / wireless connections That serves two Purposes, it Allows data to be Exchanged with the product and Enables Some functions of the product to exist outside the physical device.  : 67
Each component expands the capabilities of one another due to a “virtuous cycle of value improvement”.  First, the smart components of a product of the value and capabilities of the physical components. Then, connectivity amplifies the value and capabilities of the smart components. These improvements include:
- Monitoring of the product ‘s conditions, its external environment, and its operations and use.
- Control of various product functions, and their experience in the environment.
- Optimization of the product’s overall operations based on actual performance data, and reduction of downtimes through predictive maintenance and remote service.
- Autonomous product operation, including learning from their environment, adapting to users’ preferences and self-diagnosis and service. 
The Internet of Things (IoT)
The Internet of Things is the network of physical objects that contain embedded technology and interact with their internal states or the external environment.  The phrase “Internet of Things” reflects the growing number of smart, connected products and the new opportunities they can represent. The Internet, whether involving people or things, is a mechanism for transmitting information. What makes smart, connected products fundamentally different is not the Internet, but the changing nature of the ‘things’.  : 66Once a product is smart and connected to the cloud, the products and services will become part of an interconnected management solution. Companies can evolve from making products, to offering more complex, higher-value offerings within a “system of systems”. 
Examples of smart, connected products include:
- Tesla Motors Automobiles – a smart product with an Intelligent Maintenance System that periodically monitors itself and can autonomously alert Tesla, so that they can be resolved quickly and easily. Many issues can be resolved with a corrective software download. 
- Medtronic’s Continuous Glucose Monitoring (CGM) – a smart device with wearable technology . The digital blood glucose uses a glucose sensor inserted into the skin that measures glucose levels. Glucose sensitizing glucose levels on the screen of the user People with diabetes get a more complete picture of their glucose levels, which can lead to better treatment decisions and better glucose control. 
- Philips Lightning Hue Light Bulbs and Bridge – provides users with a connected device for home automation . Users have the ability to customize their interaction though a smartphone , as well as their system to the wider world. With it, a user can control their lights remotely or link them up to the rest of the web, newsfeeds, or even their inbox. 
- iRobot Roomba – a smart product vacuum cleaner with iAdapt Technology (an advanced system of software and sensors ) that allows Roomba to find its way around any shape or size. 
- Joy Global’s Longwall Mining System – able to operate autonomously far underground, overseen by a mine control center on the surface. Equipment is monitored continuously for the sake of performance. 
- Ralph Lauren’s Polo Tech Shirt – this example of wearable technology has lead-in-the-box technology, and a small snap-on module that weighs less than 1.5 ounces and relays a Bluetooth-connected iPhone or iPad . The “smart” part of the shirt is a stretchy band, under the pectorals, that contains conductive threads that contact the skin. A module Ralph Lauren calls the “Black Box” or “Tech Box” snaps into the shirt around the left rib cage; it receives heart-rate and breathing data from those threads through metal snaps built into the shirt. The iOS app gives users a real-time display of heart and respiration rates, and a daily view of calories burned and steps taken. 
- Petcube Camera – interactive camera with real time video and built-in laser pointer. It allows pets to watch, talk to, and play with their smartphone, no matter where they are.
- Renault R-Line – a solution developed by Worldline . The idea is to provide a continuous access to any online app. The driver can then customize the car 
- Intelligent maintenance system
- Smart objects
- Ubiquitous computing
- ^ Jump up to:a b c Porter, ME; Heppelmann, JE (November 2014). “How Smart, Connected Products Are Transforming Competition” . Harvard Business Review .
- Jump up^ “The New Era of Smart, Connected Products Is Changing How Businesses Compete” . Wall Street Journal. November 28, 2014.
- Jump up^ “Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units by 2020” . Gartner . December 12, 2013.
- Jump up^ Dan Ostrower (November 2014). “Smart Connected Products: Killing Industries, Boosting Innovation” . Wired Magazine.
- Jump up^ Tesla Motors
- Jump up^ “Continuous Glucose Monitoring – Insulin Pumps – Medtronic Diabetes” .
- Jump up^ Phillips Hue
- Jump up^ “iRobot Roomba Vacuum Cleaning Robot” .
- Jump up^ How Smart, Connected Products are Transforming CompetitionHarvard Business Review. pp 71
- Jump up^ Your Next Polo Shirt Could Have an Activity Tracker Built Right InWired Magazine
- Jump up^http://worldline.com/content/dam/worldline/documents/publications/brochures/connected-living-8p-en-ld.pdf