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The Hype and the Hope for the IoT

Back in January the Consumer Electronics Show in Las Vegas featured the first big opportunity for companies to promote their possibilities in the Internet of Things (IoT). The IoT market is still embryonic, so the show floor was dominated primarily by small firms trying to make their mark – most with smart watches, which is still the hot topic of tech discussions in mainstream media.

Source: www.giga.de

Source: www.giga.de

Froth about the IoT has hardly abated. There is a continual deluge of announcements from the likes of Samsung, Sony, Apple, Toshiba, even IBM and Intel concerning their plans to shape and drive this nascent market.

2015 will be a pivotal year for high tech and the global economy in general. With the mobile computing segment (tablets and smartphones) rolling over in 2014 and likely plateauing this year, gaining a sense of where the early trends for the IoT are heading is critical.

Wearables

The fashion of this world passeth away. – I Corinthians, VII. 31

As the first major product push into the IoT by many consumer products companies, the smart watch category has grabbed almost all the headlines. There is widespread hope in the electronics and finance sectors that smart watches will be the 'next big thing' to supersede smartphones and tablets.

Yet the segment's problems were apparent back in Las Vegas in January, with their deficiencies all the more glaring today. Functionality and battery life in such a small form factor are necessarily quite restricted, except for very expensive high-end models (such as those from Apple). Furthermore, in an attempt to avoid the market risks and ephemeral appeal of fashion, most smart watchmakers made their designs as unobtrusive as possible. The result is a huge selection of small plastic pastel-colored devices that all look basically alike and have nearly the same small set of capabilities oriented towards high-end consumers with disposable income and moderately athletic lifestyles.

Some companies are quickly adjusting by hiring designers and executives from the fashion industry or teaming up with established high-end watchmakers. It's likely that such staffing and partnership efforts will become 'de rigueur' for success in not just smart watches, but wearable electronics in general.

A special category of wearables is the smart glass sector. In the beginning, Google Glass grabbed all the attention. Yet by focusing too much on the marvels of its technology (and admittedly it's a good hardware and software design, though a very expensive one), Google committed the cardinal sin of releasing a consumer product without understanding the potential range of reactions from their target audience. The first glowing press reports quickly turned negative and even choleric as the frame colors and outline clashed with individual style preferences and the wider public began to reject (sometimes violently) the eavesdropping potential of Glass's image, audio and video recording features.

With the recent withdrawal of Google Glass from the market for extensive redesign and repurposing, Google has now shockingly found itself in a trailing position. Rival offerings from Toshiba, Sony, and Epson, though all heavier, clunkier, and more vision-restricting than Glass, are far ahead of Google in developing partnerships, customers and specialized support in medical, industrial design and other applications.

Medical

While smart glasses are in the long run likely to prove highly versatile platforms that will have some medical applications, there are companies that are already releasing wearables tailored for the needs of patients and practitioners in medical assistance, monitoring, and diagnostics. There are wireless products available that include functions such as pulse oximetry, body temperature measurement, collecting hemoglobin statistics, taking EEG readings and checking blood pressure.

The IoT implications to the medical field are profound even in their infancy. There are opportunities to shrink PPE costs for hospitals, as cheap disposable sensors replace expensive, entangling cables that require continual cleaning, or a single workstation with wireless connectivity replacing multiple units of the same monitoring instrument for each patient and hospital room. There are also huge benefits to patient mobility and outpatient tracking of vital statistics.

Semiconductors

The sculptor does not work for the anatomist, but for the common observer of life and nature. – John Ruskin

System on a Chip (SoC) and microcontroller unit (MCU) firms are openly salivating over the prospects at hand in the burgeoning IoT market. A stampede of hopefuls are creating low cost development hardware to either compete against or be compatible with the Arduino, Raspberry Pi, and Beagle nonprofit offerings.

However, there are a selection of much smaller companies that are looking at the IoT not as a fresh market to quickly capitalize on with their current product portfolio, but as an opportunity to entrench themselves at ground level by developing unique expertise and value-add thru focused technical innovation in hardware and software. Firms such as Nordic Semi and Linear Dimensions are developing IP and reference designs specifically for consumer, industrial, medical, and mobile IoT applications. Such companies are also at the forefront of wrestling with the most pernicious problems of IoT systems and chips such as power efficiency, bandwidth, range, and P2P communications with current wireless standards and protocols.

Conclusions

Though the IoT is still in its earliest phases, we can still safely make some broad generalizations about its current state and future directions.

  1. Fashion matters greatly for wearables. This is a mostly alien concept for high tech and will require learning far greater design aesthetics than even the smartphone providers have.
  2. The IoT impacts individual appearance and also, more importantly, one's sense of personal security. The implications of the latter in particular are legion.
  3. Clearly, nobody has figured out all the applications possibilities yet. Smart watches are just the beginning and currently a mere fad.
  4. Market growth and technology evolution will not be linear, but tumultuous. Change will be feverish and violent, with fierce growth spurts along with contractions, reversals and oscillations.
  5. Currently targeted consumers represent only the top 10% of wage earners. There is as yet no mass-market product offering equivalent to smartphones in value and ubiquity.

All of the above suggests that the IoT may be off to a bit of a slow start. This is, however, not the only incipient growth market facing high tech  today. We'll look at other market opportunities in the next installment. In the meantime, let us know  your thoughts in the comments section below.


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http://globenewswire.com/news-release/2015/03/30/720179/0/en/Supply-Chain-Analytics-Market-by-Solution-Worldwide-Forecast-and-Analysis-to-2019-for-the-4-8-Billion-Market.html

3 comments on “The Hype and the Hope for the IoT

  1. apek
    April 30, 2015

    Good artile Peter. I realy doubt IoT can really succeed in a debt based economy where government encourages everyone to keep borrowing and keep increasing the consumer and national debt. Wonder where will IoT take US ECONOMY from 18 trillion to may be 50 trillion dollar debt? Isn't that insane? Dont we need to have an economic system in place which constantly increases purchasing power of consumers in order for IoT to make a success story for High Tech?

  2. Eyetalian Stallion
    April 30, 2015

    Thank you, Apek. 🙂

    In my head (and, I suspect, in the heads of somewhat classically oriented economists), a consumer economy is indeed undesirable, but an economy where consumers do spend and yet are primarily SAVERS while the big spending for economic growth comes from private sector INVESTMENT in PPE seems to me more desirable and sustainable. I suspect the IoT would fit extremely well in such an economic framework. Instead, we have an IoT oriented at the moment towards making a million smartwatch brands of which 99% of them are nearly identical. 😉

    A debt based economy is unsustainable, so I'm sure we'll get to a healthier environment sooner rather than later.

  3. apek
    April 30, 2015

    Consumer spends money in economy only when consumer has money to spend. If consumer has no money to spend…he has to go into debt. That is precisely what is happening in today's US economy. From point of view of classical and neo-classical economists, they need smaller government and lower taxes. But, If there is no effort to eliminate unemployment, how can size of government be reduced and also how can taxes be reduced. Also, the employment created should be able to sustain greater demand for more IoT products for which you need higher buying power for consumers.

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