The Internet of Things: Sizing up the opportunity

Three years ago, industry pundits and analysts predicted that, by 2020, the market for connected devices would be between 50 billion and 100 billion units. Today, the forecast is for a more reasonable but still sizable 20 billion or 30 billion units. This leveling off of expectations is in line with what we have seen in past introductions of new technologies. Throughout the late 1990s and early 2000s, for instance, there was much discussion in the semiconductor industry about the potential benefits and implications of Bluetooth technology, but the inflection point for Bluetooth did not happen until 2003 or 2004, when a large enough number of industry players adopted it as a standard and pushed new Bluetooth-based devices and applications into the market. The market for Internet of Things devices, products, and services appears to be accelerating toward just such an inflection point, in view of four critical indicators.

Supplier attention: Internet of Things developer tools and products are now available. Apple, for instance, has released HealthKit and HomeKit developer tools as part of its latest operating-system upgrade, and Google acquired Nest to catalyze the development of an Internet of Things platform and applications.

Technological advances: Some of the semiconductor components that are central to most Internet of Things applications are showing much more functionality at lower prices. Newer processors, such as the ARM Cortex M, use only about one-tenth of the power that most energy-efficient 16-bit processors used only two years ago. This leap forward in technological capabilities is apparent in the evolving market for smart watches. The first such products released in 2012 boasted 400-megahertz single processors and simple three-axis accelerometers. Now a typical smart watch will include 1-gigahertz dual-core processors and high-end, six-axis devices that combine gyroscopes and accelerometers. Meanwhile, the prices of the chip sets used in these products have declined by about 25 percent per year over the past two years.

Increasing demand: Demand for the first generation of Internet of Things products (fitness bands, smart watches, and smart thermostats, for instance) will increase as component technologies evolve and their costs decline. A similar dynamic occurred with the rise of smartphone usage. Consumer demand for smartphones jumped from about 170 million devices sold annually just four or five years ago to more than a billion devices in 2014. The increase in orders coincided with a steep decline in the price of critical smartphone components.

Emerging standards: Over the past two years, semiconductor players have joined forces with hardware, networking, and software companies, and with a number of industry associations and academic consortiums, to develop formal and informal standards for Internet of Things applications. AT&T, Cisco, GE, IBM, and Intel, for instance, cofounded the Industrial Internet Consortium, whose primary goal is to establish interoperability standards across industrial environments so that data about fleets, machines, and facilities can be accessed and shared more reliably. Other groups have been focused on standardizing the application programming interfaces (APIs) that enable basic commands and data transfer among Internet of Things devices.

Digital Africa Conference and Exhibition 2016 edition is Themed “AcceleratedDevelopment for Africa with IoE (Internet of Everything)” holds from the 1st – 3rd of June, 2016 at the International Conference Centre, Abuja. The Internet of Everything has gone from a small and interesting topic of conversation to an industry with the potential to change the way the world functions.