Smart, connected products are transforming competition by integrating hardware, sensors, data storage, microprocessors, software, and connectivity. These products offer new functionality, reliability, and capabilities that transcend traditional product boundaries, reshaping industry structures and value chains. They create new competitive opportunities and threats, expanding industry boundaries and generating entirely new industries. Companies must rethink how they create and capture value, manage data, and redefine relationships with partners. The internet of things (IoT) reflects this shift, but the key change lies in the evolving nature of "things." Smart, connected products are driven by advancements in processing power, device miniaturization, and wireless connectivity, enabling dramatic improvements in product functionality and performance. The third wave of IT-driven competition is reshaping industries, with smart, connected products becoming integral to the product itself. This transformation requires companies to build new technology infrastructure, including a "technology stack" with layers such as hardware, software, connectivity, and a product cloud. Smart, connected products enable capabilities in monitoring, control, optimization, and autonomy, allowing for predictive maintenance, remote service, and autonomous operation. These products also create new strategic choices, including how value is created and captured, how data is managed, and how companies position themselves in evolving industry boundaries. The article discusses the implications of smart, connected products on industry competition, including the five forces that shape industry structure, the redefinition of industry boundaries, and the need for new strategic choices. Companies must adapt to these changes to achieve competitive advantage, focusing on operational effectiveness, strategic positioning, and the integration of smart, connected capabilities into product design, service, marketing, human resources, and security. The article highlights examples from various industries, including mining, energy, and consumer goods, demonstrating the transformative impact of smart, connected products on competition and industry structure.Smart, connected products are transforming competition by integrating hardware, sensors, data storage, microprocessors, software, and connectivity. These products offer new functionality, reliability, and capabilities that transcend traditional product boundaries, reshaping industry structures and value chains. They create new competitive opportunities and threats, expanding industry boundaries and generating entirely new industries. Companies must rethink how they create and capture value, manage data, and redefine relationships with partners. The internet of things (IoT) reflects this shift, but the key change lies in the evolving nature of "things." Smart, connected products are driven by advancements in processing power, device miniaturization, and wireless connectivity, enabling dramatic improvements in product functionality and performance. The third wave of IT-driven competition is reshaping industries, with smart, connected products becoming integral to the product itself. This transformation requires companies to build new technology infrastructure, including a "technology stack" with layers such as hardware, software, connectivity, and a product cloud. Smart, connected products enable capabilities in monitoring, control, optimization, and autonomy, allowing for predictive maintenance, remote service, and autonomous operation. These products also create new strategic choices, including how value is created and captured, how data is managed, and how companies position themselves in evolving industry boundaries. The article discusses the implications of smart, connected products on industry competition, including the five forces that shape industry structure, the redefinition of industry boundaries, and the need for new strategic choices. Companies must adapt to these changes to achieve competitive advantage, focusing on operational effectiveness, strategic positioning, and the integration of smart, connected capabilities into product design, service, marketing, human resources, and security. The article highlights examples from various industries, including mining, energy, and consumer goods, demonstrating the transformative impact of smart, connected products on competition and industry structure.