We live in a period of intense and concentrated technological change, to the extent that we sometimes lose perspective on just how quickly things around us are transforming for the future. If we think about the life-changing technologies that we interact with on a daily basis, many of them were likely not present in the marketplace as recently as ten or twenty years ago.
Take mobile phones as an example. In 1993, the market penetration of mobile phones in the United States was essentially 0%. The available models were bulky and unreliable - you were more likely to see a car phone in an MTV music video than to see someone walking down the street with a phone in their hand. However, as telecommunications technology continued to develop and thanks to major innovations in networking, hardware, and other tech markets, the global market for mobile phones has grown tremendously.
Today, there are over 3.3 billion smartphone users in the world and some regions (Africa, Middle East, Latin America) actually have a market penetration rate of greater than 100% for mobile phones, meaning that the average person owns more than one! Market penetration in the United States sits at roughly 94%, and throughout the world, there are nearly 9 billion mobile connections (more than the global population).
Mobile phones, computer hardware, and big data analytics have advanced leaps and bounds in the past two decades and now these technologies are being combined to support a new kind of device that will revolutionize how businesses do computing: the Internet of Things (IoT). IoT devices include any computing devices that can connect to the internet or the cloud using wireless communication protocols to transmit or share data. In this blog piece, we discuss the adoption and expansion of the IoT that will affect the future of technology.
How the Internet of Things is Impacting Technology
The IoT represents one of the strongest transformative influences on the tech landscape today, with impacts on industry verticals that include manufacturing, aerospace and defense, autonomous vehicles, smart cities, connected health care applications, and more. To quantify the impact of the IoT, we can look at adoption rates for IoT devices as well as projections for future growth.
A McKinsey & Co. report finds that the number of businesses that have implemented IoT technologies increased from 13% in 2014 to 25% by July 2019. The same report projects that the number of connected devices deployed around the world will increase to 43 billion by the year 2023, representing a three-fold increase in the number of devices over a five-year period. This is due in part to the over 200 current enterprise applications that have been identified for IoT devices. A separate report compiled by Statista suggests that by 2025, the total installed base of IoT-enabled hardware will amount to over 75 billion devices.
With analysts generally in agreement about the huge positive growth trajectory of the IoT, it begs the question: where will all of these devices be deployed? Who will benefit? IoT devices are already being deployed in industrial, commercial, and residential contexts. While some of these applications are already delivering significant economic benefits, other areas of IoT application are still in their developmental infancy. Let's take a look at a few of the markets where IoT devices are re-shaping the future.
Image by Connected Vehicles and the IoT
The first application for connected vehicles emerged in 1996 when General Motors marketed its OnStar product as a high-end safety feature that could help drivers remotely access emergency navigational, operational, or medical assistance. As many other vehicle manufacturers have done since then, GM partnered with a leading technology company - Motorola Automotive in this case - to implement a connectivity feature.
Since then, we've seen a range of applications emerging for connected vehicles. There are features that provide current traffic information, helping drivers reach their destinations more quickly while optimizing fuel consumption. There are safety features that use on-board sensors and embedded systems to alert drivers to conditions outside the vehicle. Car manufacturers are currently partnering with the world's largest technology and transportation service companies to develop self-driving autonomous vehicles that will interface with the cloud using the IoT.
Wearable Medical Devices and the IoT
Connected wearable devices for health care are a growing market segment for IoT devices. These devices are in high demand for several important reasons:
- They can provide patients with real-time data, information, and feedback into their own medical conditions, empowering them to take control of their healthcare outcomes.
- They can be configured to interface with electronic health records, which could allow physicians using specialized software systems to remotely monitor patient health status via connected wearables.
- The ability to upload data from connected wearables to the cloud means that patients can be discharged more readily following major surgery or hospital stay. Hospitals in the US have already conducted implementation case studies where the deployment of connected wearables reduced the average number of nights per stay for patients, freeing up hospital beds for unexpected demand surges.
Smart Retail and the IoT
IoT devices have entered retail spaces around the world. Merchants in a variety of retail segments are using RFID inventory tracking chips, infrared foot-traffic counters, cellular tracking systems, and a range of other IoT technologies to drive improvements to the shopping experience and reduce their operating costs. Applications of IoT devices in the retail space include:
- Predictive equipment maintenance and smart power systems that reduce store power consumption and reliably anticipate the maintenance needs of business-critical equipment like grocery store freezers, warehousing machinery, and temperature control systems.
- Smart stores that use RFID technology to automatically track purchase orders and bill shoppers for merchandise as they leave the store. This technology was first implemented at the Amazon Go store in Seattle, which offered shoppers the opportunity to walk into a store, grab what they wanted, and pay for purchases automatically upon exiting the store, all without standing in line at the checkout counter.
- RFID inventory technology can also change the ways that shoppers interact with items in-store. In the future, shoppers may be able to scan identification tags for a chosen item using their mobile device, gaining access to additional information such as nutrition and product origin along with the ability to pay on the spot.
Smart Homes & Appliances and the IoT
Smart homes are one of the largest areas of opportunity within the wider IoT marketplace, with demand for smart home appliances expected to grow at an annual rate of 32% through 2025 according to Business Wire. Venture capital firms have already invested billions in start-up companies like Ecobee, Nest, and Belkin that offer smart home devices and there is additional competitive pressure coming from established industry giants like Samsung and Philips.
Smart home technology has plenty of room to grow, as the solutions available today still have not gained the huge market traction that you would expect from a technology that promises to streamline home living for millions of people.
Smart Cities and the IoT
Smart cities are still in the conceptual stage of technology development, but early results are showing promise. In Cologne, Germany, a number of smart city projects are underway that include:
- Construction and upgrades of energy-optimized buildings, including some that produce more energy than they consume
- Implementation of smart LED street lights to reduce power consumption
- Heat recycling systems which capture thermal energy from sewage systems that would otherwise be wasted
A fully developed smart city could use IoT technology to better coordinate municipal services, improve resource utilization (water, electricity, gas, etc.), optimize public and private transportation, enhance public safety, streamline municipal payments and financial transactions, and a range of other applications. Cooperation and mutual investment between the public and private sectors will be required to effectively implement smart cities around the world.
The Future Development of the IoT
The future is bright for the development of the IoT, with many indicators suggesting that this rapidly expanding market segment will continue to grow and develop into the future:
- The average cost of IoT sensors fell from $1.30 USD each in 2004 to just $0.38 each in 2019, significantly increasing the affordability of assembling devices.
- Global transistor manufacturing has increased to keep up with the demand for IoT devices. The total number of transistors in the world increased from 2.4 billion in the year 2000 to 9 billion by 2018.
- Most IoT applications use public cloud infrastructure, a service whose costs have continued to decline. The average base cost for Infrastructure-as-a-Service (IaaS) decreased by nearly 30% over a four-year period beginning in 2014.
- One of the most significant drivers for IoT growth is the cost of connectivity. In the five years between 2014 and 2019, the cost of transferring 1GB of data through wireless data systems decreased by a factor of 10.
As computing hardware and services continue to decline in cost, the growing affordability of IoT devices and their related applications will continue to drive innovation and adoption across industry verticals.
The Future of IoT Devices
While the future of IoT devices looks promising, there are still a couple of hurdles that have yet to be overcome. The major challenges for organizations developing IoT technology today are:
- Security - Many of the earliest IoT devices lacked any considerations for device security, making it surprisingly easy for someone with a bit of specialized know-how to execute cyber-attacks against IoT devices, including home security systems and connected systems embedded in vehicles. The biggest upcoming challenge for the IoT will be securing devices adequately against cyber-attacks to ensure a safe and connected future.
- Interoperability - The concept of device interoperability is that IoT devices should follow a common communication protocol that makes it easy to coordinate them with existing devices and technologies. This is especially an issue in healthcare applications where device interoperability issues can mean poor coordination between connected wearables and EHR software systems. For highly regulated industries, IoT manufacturers should work to develop a common standard of interoperability that ensures IoT devices can seamless communication with other devices and information systems in the field.
- Product/Market Fit - While the concept of the IoT has many people excited, these are entire industries that have yet to establish a product-market fit that can lead to high market penetration. While some areas like manufacturing have had success with the early adoption of IoT systems, other areas like smart retail have seen little market penetration so far. IoT device manufacturers have the capabilities to architect an amazing world for consumers, but to succeed they'll need to concisely capture user needs and deliver the experiences that consumers want.
Summary
IoT devices represent a fast-growing market segment that combines cloud computing and connective technology with embedded systems and microcontroller architecture.
Are you creating an IoT device that will change the future, developing a standard for device interoperability, or innovating new ways of securing IoT devices? For embedded engineers building products for IoT applications, Total Phase provides the development and diagnostic tools needed to accelerate the development cycle while optimizing product performance and meeting user needs.
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