The Internet of Things (IoT) is a scenario in which objects, animals or people are provided with unique identifiers and the ability to automatically transfer data over a network without requiring human-to-human or human-to-computer interaction. IoT has evolved from the convergence of wireless technologies, micro-electromechanical systems (MEMS) and the Internet.
The “Internet of Things” was a major focus at this year’s Consumer Electronics Show, with virtually every company introducing more connected devices. This is for good reason, as a report from last December said the Internet of Things industry would be worth $309 billion by 2020. That’s just the tip of the iceberg, though, according to Cisco CEO John Chambers.
He believes the Internet of Things will create $19 trillion in “economic benefit and value” in the next decade. Where did he come up with this number? It’s not clear, but he shared some interesting numbers on the growth of Internet-connected devices: In 1984, only 1,000 devices were connected to the Internet; in 2010, there were 10 billion connected devices; and by 2020, Chambers expects there to be 50 billion connected devices.
He also thinks the Internet of Things will have a 5 to 10 times larger impact on the world than the Internet itself.
The widespread adoption of the Internet of Things will take time, but the time line is advancing thanks to improvements in underlying technologies.
- Advances in wireless networking technology and the greater standardization of communications protocols make it possible to collect data from these sensors almost anywhere at any time.
- Ever-smaller silicon chips for this purpose are gaining new capabilities, while costs, following the pattern of Moore’s Law, are falling.
- Massive increases in storage and computing power, some of it available via cloud computing, make number crunching possible at very large scale and at declining cost.
None of this is news to technology companies and those on the frontier of adoption. But as these technologies mature, the range of corporate deployments will increase. Now is the time for executives across all industries to structure their thoughts about the potential impact and opportunities likely to emerge from the Internet of Things.
Internet of Things Market Forecast:
Internet of Things is going to be big, but just how big? Below let’s look at some analyst’s estimates on the size of this market and how to approach it as it moves forward in its development.
- The Internet of things and the technology ecosystem surrounding it are expected to be a $8.9 trillion market in 2020
- The installed base of things connected will be 212 billion by the end of 2020, including 30.1 billion connected autonomous things. Intelligent systems will be installed and collecting data by this point.
- Internet of things technology and services spending at $4.8 trillion in 2012 and expects the market to be $8.9 trillion in 2020 and have a compound annual growth rate of 7.9 percent.
- IoT, which excludes PCs, tablets and smartphones, will grow to 26 billion units installed in 2020 representing an almost 30-fold increase from 0.9 billion in 2009.
- IoT product and service suppliers will generate incremental revenue exceeding $300 billion, mostly in services, in 2020. It will result in $1.9 trillion in global economic value-add through sales into diverse end markets.
- By 2020, the number of smartphones tablets and PCs in use will reach about 7.3 billion units,” said Peter Middleton, research director at Gartner. “In contrast, the IoT will have expanded at a much faster rate, resulting in a population of about 26 billion units at that time.”
- By 2020, component costs will have come down to the point that connectivity will become a standard feature, even for processors costing less than $1. This opens up the possibility of connecting just about anything, from the very simple to the very complex, to offer remote control, monitoring and sensing.
- Economic value-add (which represents the aggregate benefits that businesses derive through the sale and usage of IoT technology) is forecast to be $1.9 trillion across sectors in 2020. The verticals that are leading its adoption are manufacturing (15 percent), healthcare (15 percent) and insurance (11 percent).
- IoT will also facilitate new business models, such as usage-based insurance calculated based on real-time driving data. The banking and securities industry will continue to innovate around mobile and micropayment technology using convenient point-of-sale (POS) terminals and will invest in improved physical security systems. IoT will also support a large range of health and fitness devices and services, combined with medical advances, leading to significant benefit to the healthcare sector. Emerging connected sensor technology will lead to value creation in utilities, transportation and agriculture. Most industries will also benefit from the generic technologies, in that their facilities will operate more efficiently through the use of smart building technology.
(More detailed analysis is available in the report “Forecast: The Internet of Things, Worldwide, 2013.” The report is available at http://www.gartner.com/document/2625419?ref=QuickSearch&sthkw=G00259115.)
3. Business Insider Intelligence:
- 1.9 billion devices today, and 9 billion by 2018, roughly equal to the number of smartphones, smart TVs, tablets, wearable computers, and PCs combined.
- There are an estimated 1.5 trillion things in the world (no mention of exactly how they counted those things, but let’s go with it) and approximately 8.7 billion, or 0.6%, were connected in 2012. The firm expects a 25% annualized decrease in price to connect between 2012 and 2020 and a matching 25% annualized increase in connectivity.
- This means that there will be 25 billion devices connected to the Internet by 2015 and 50 billion by 2020. It is important to note that these estimates do not take into account rapid advances in Internet or device technology; the numbers presented are based on what is known to be true today
- IoE Value at Stake will be $14.4 trillion for companies and industries worldwide in the next decade. More specifically, over the next 10 years, the Value at Stake represents an opportunity to increase global corporate profits by about 21 percent.
- Between 2013 and 2022, $14.4 trillion of value (net profit) will be“up for grabs” for enterprises globally — driven by IoE.
(For more, visit this link http://www.cisco.com/web/about/ac79/docs/innov/IoT_IBSG_0411FINAL.pdf and http://www.cisco.com/web/about/ac79/docs/innov/IoE_Economy.pdf)
5. McKinsey Global Institute:
- “We estimate the potential economic impact of the Internet of Things to be $2.7 trillion to $6.2 trillion per year by 2025 through use in a half-dozen major applications that we have sized. The largest impacts among sized applications would be in health care and manufacturing. Across the health-care applications we analyzed, Internet of Things technology could have an economic impact of $1.1 trillion to $2.5 trillion per year by 2025.”
To read more insights and projections on the market of Internet of Things, please visit http://postscapes.com/internet-of-things-market-size.