Originally published in finmaps.com
In today’s world we are witnessing how the Internet of Things is expanding rapidly and how it is here to stay. The Internet of Thing (IoT), or as some prefer it, the Internet of Everything (IoE), is the reference to various objects or devices that are connected to the expanding global network known as the Internet. From simple devices like the smartwatch you just purchased, your refrigerator, or even your car. As technology has grown and the world is becoming ever so intertwined and interconnected, such devices have been blueprinted, built and programmed to collect and send any and all data through the Internet. And imagine the amount of data is being compiled by these devices as they continue to contribute to what many are describing as our “big data world.” Our world is already being transformed by smart devices that are connected to each other and the world beyond them, all via the Internet. Even the competitive forces in the business industry is changing as we speak.
The numbers generated from the IoT industry are described as mind-boggling, to say the least, all indicating the amazing speed that this sector is growing. There is also the impact the IoT industry will have on the lives and businesses of each and every one of us. When confronted with such stats we begin to further realize and reality sinks deeper in that this industry is here to stay, and we will be left behind if we fail to keep in touch.
While the term may seem simple, the majority of us, as much as 87 percent, have never even heard of the term ‘Internet of Things’. However, the economy forecasted for this industry already looms around $11 trillion by 2025.
1974 was the year when the automatic teller machine (ATM) went online, considered the very first IoT machine on earth. While the first ATM machine began its work 5 years earlier in 1969 in the United States, with their debut on a network coming five years later. (Still, more than 40 years later, apparently only 13 percent of our society has heard about IoE.)
The number of objects connected to the Internet in 2008 surpassed the population of humans connected to this ever so important network. And down the road, in 2016 we will be witnessing 4.9 billion devices connected to such a network. While concerning for some, it is profitable to many to hear that the number of Internet-connected objects by 2020 will reach an estimate of at least 50 billion. Even imagining such a number is sometimes hard.
The smartphone industry is booming and over 1.4 billion such devices were exported and shipped in 2015 alone. We are only 4 years away but in 2020 it is estimated that the number of smartphone devices in people’s hands will skyrocket even beyond 6.1 billion.
Many of our home appliances will be connected by IoT, being the smart fridge to the smart coffee maker and beyond. Google and Samsung, and other companies in their range, easily understand the potential in all this. For example, Google paid $3.2 billion to purchase Nest Labs, a smart thermostat maker, while Samsung didn’t fall behind and paid $200 million to purchase Smart Things, a connected home company gaining trend.
We will be facing totally new possibilities by the year of 2020, as more than 250 million vehicles will be on the road while connected to the Internet. This also opens a huge window of possibilities regarding in-vehicle services and also autonomous driving. Just imagining the advertisement industry’s potential in this regard is truly spectacular.
In the meantime, we are already witnessing our roads being occupied by cars driving on their own. With companies across the board in a fierce rivalry for this booming industry, the self-driving cars of Google are averaging around 10,000 miles each week by their autonomous cars.
Another huge market is available in wearable devices, growing at a whopping rate of 223 percent in 2015 alone. The company Fitbit is known to have shipped 4.4 million such devices, while Apple was able to sell 3.6 million of its famous Apple Watches. And yes, all of these devices are connecting to the Internet, making us think that we may be connected to the Internet 24/7, without even knowing.
It doesn’t end with just watches. Looming around the corner is the industry of Internet-connected clothing. By 2020 around 10.2 million different units of smart clothing are expected to be shipped, estimates indicate. This is amazing when comparing to the 140,000 units back in 2013.
There is also a market that even less people have probably heard about: Radio Frequency Identification (RFID). These devices are used to have ongoing data transmission and allowing users to identify and track objects based on their needs. This simple market, as it may seem, is already valued at $11.1 billion, and predictions indicate a near two-fold rise to $21.9 billion by 2020.
Connections involving machine-to-machine (M2M) will witness a colossal growth from 5 billion from early 2016 to, are you ready, 27 billion by 2024. This means a five-fold increase in less than 8 years. And the alarming part for industry owners in the West is that China is surpassing the United States by taking 21 percent in comparison to America’s 20 percent.
For a more general perspective, GE has indicated that the “Industrial Internet” (their explanation of IoT) will inject $10 to $15 trillion to the world’s GDP in the next two decades alone. The gross economic impact of IoT is estimated at up to $11 trillion by 2025, as reported by the McKinsley Global Institute.
To think about the entire issue in terms of reducing costs, a connected kitchen in every home can help the food and beverage industry reduce costs by as much as 15 percent each year. And for the public sector, CISCO has estimated IoT has the potential to generate $4.6 trillion through the span of the next ten years. These numbers for the private sector rise to $14.4 trillion.
Expanding and further mounting may probably be the best terms for the Internet of Things. There is a long road ahead as experts believe less than 0.1 percent of all current devices able to be connected to the Internet are actually linked to the global network. Just thinking of the incredible potential and unlimited opportunities made possible for all businesses and society as a whole is again, mindboggling.
The author, Paul McNeil is a tech analyst specializing in the political and moral perspectives of today’s innovative world. He blogs on these issues at TechMoralitics and followed on Twitter @mcneil_lfc. You can also view his LinkedIn profile here.