The Internet Of Things Explained – And How To Benefit From It

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The Internet Of Things Explained - And How To Benefit From It
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What Is The “Internet of Things” / IoT?



The Internet of Things, put simply, connects the internet with the physical world of objects. We are all accustomed to the fact that a level of connectivity has enabled our laptops, tablets, and smartphones to communicate with each other. The IoT will play an important role by allowing video cameras, car sensors, coffee makers, wearable devices, washing machines, pacemakers and other “smart objects” to “talk” with the previous group of mobile devices and other technologies.

The Internet of Things is a booming industry experiencing very rapid growth. It has evolved due to the convergence of multiple technologies including machine-learning, wireless communications and embedded sensors. The birth of the IoT wouldn’t be possible without the proliferation of the services offered by embedded systems, wireless sensor networks, control systems, and automation. [1]

According to a report published by research firm Gartner, there will be 26 billion units of physical objects to be connected to the Internet of Things (IoT) by 2020 (excluding smartphones, tablets, and laptops). The report also estimated the incremental revenue to be generated by IoT product and service suppliers in 2020 – a whopping $300 billion. [2] Another report released by McKinsey revealed that the total economic impact of the IoT on the global economy could reach more than 11 trillion dollars per year by 2025. [3] The IoT is already empowering industries, businesses, and consumers to meet their objectives in new and innovative ways.

Current Leaders in IoT

As more devices and technologies join in the IoT “conversation”, various industries will benefit from the explosion of the sector. These industries will contribute to the explosive growth that is expected to happen in the IoT arena in the next decade and beyond.

Based on the numbers presented by several IoT reports, there will be a huge untapped market for smart products of all kinds – a situation that companies should be aware of and not be caught off guard by. Here are some of the companies that are currently leading in the smart devices area.



Nest Labs: Nest creates a suite of “smart home” decides including programmable security cameras, thermostats and smart locks with some interesting an innovative features – for example the camera being able to send notifications and screen shots when movement is detected in the location of the camera. Google purchased the manufacturer as one of the internet giant’s diversification tactic to enter the IoT field. [4]

Fitbit, Inc.:The wearable devices maker is the dominant company in the fitness-tracking arena. However, more entrants are foraying into the market including tech behemoth Microsoft which launched its own health-oriented wearable device.

Samsung: The South Korean company offers a range of products that makes it uniquely poised to profit from IoT innovations. Samsung manufactures washing machines that users can control remotely while doing other tasks at home. Its umbrella of devices also includes microwave ovens and Blu-ray players.

General Electric: The industrial giant has been investing into smart product research since 2012. The American company is making a big wager on IoT as it diversifies from its major niches: aviation, locomotive, and manufacturing.

Bayer-Monsanto: The agro-industrial firm’s foray into IoT includes the acquisition of a technology firm, Climate Corp., that helps farmers predict the weather. Monsanto expects Climate Corp to earn between 300 and 400 million dollars by 2025.

How Should An Investor Evaluate the Opportunities In IoT?

According to a Forbes article, there are three types of sub-players that will derive benefit from companies dominating the IoT industry. [5] Like spokes in a wheel, these firms assist in development and support the products.

1. Infrastructure providers: The main foundation of IoT relies on the manufacturers of processor chips, wi-fi networks, sensors, and networking products. They are clearly poised to benefit from the “supernova explosion” of IoT. These companies include Cisco, Intel, Qualcomm, and Freescale Semiconductor.



2. Manufacturers of Connected Devices: Companies that delve into IoT are diversifying and innovating to reach more consumers. This has resulted in the development of new products such as smart thermostats, smart apparel and wearable devices. Investors should look at the manufacturers of IoT-connected devices as well as those companies that adopt these devices into their products.

3. Retailers: IoT is positioned to revolutionize the retail industry, but how? Stores can now track the shopping behavior of their customers in-store by using RFID tags which communicate with an app installed on a shopper’s mobile device. A repository of shoppers’ buying habits would enable retailers to determine more readily which items are selling like hotcakes, which are not attractive to consumers and more.

How Consumers Can Benefit From IoT

IoT is so huge these days that it is now a major “player” at the Consumer Electronics Show event held in Las Vegas in January. The companies at CES are extensively investing in IoT adoption and upgrade which would result in wins for consumers. Here are some of the IoT consumer benefits based on various sources.

1. Convenience: Users can make life easier and – for example exerting control over appliances while not physically at home. The interconnection between devices and aggregation of information could save consumers time and money, eliminating various complexities they now negotiate themselves.

2. Security: IoT devices are equipped with digital keys to limit or allow access. If you lose a mobile device, it can more easily be tracked or found. IoT technologies are designed to mitigate the weaknesses often associated with “ordinary” physical methods to secure valuables.

3. Efficiency: Simpler verification processes for products and services are now possible, thanks to IoT infrastructure which continues to be developed and enhanced. Real-time information allows consumers to have accurate billing for utilities like energy and water.

4. Simplicity: Consumers can now use an online service to remind them that they are running out of gas as well as other house items such as distilled water, toiletries, and even fruits and vegetables. Darty and Amazon dash buttons are among the most popular IoT applications at home.

References:

[1] Wikipedia. Internet of Things
https://en.wikipedia.org/wiki/Internet_of_things

[2] Nathan Eddy. November 10, 2015. Information Week. Gartner: 21 Billion IoT Devices To Invade By 2020
http://www.informationweek.com/mobile/mobile-devices/gartner-21-billion-iot-devices-to-invade-by-2020/d/d-id/1323081

[3] Michael Chui, Vasanth Ganesan, and Mark Patel. McKinsey & Co. July 2017. Taking the pulse of enterprise IoT
http://www.mckinsey.com/global-themes/internet-of-things/our-insights/taking-the-pulse-of-enterprise-iot

[4] Lance Whitney. February 12, 2014. Google closes $3.2 billion purchase of Nest
https://www.cnet.com/news/google-closes-3-2-billion-purchase-of-nest/

[5] Greg Petro. September 10, 2014. Forbes. How Investors Can Profit From The Internet Of Things
https://www.forbes.com/sites/gregpetro/2014/09/10/how-investors-can-profit-from-the-internet-of-things/#57c57d222f52

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