With the expansion of the Internet of Things (IoT) market, the sector is likely to overtake PCs and smartphones to become the biggest Internet platform next year. As a result, major companies are expediting the development of IoT-related businesses.
According to market research firm BI Intelligence on February 4, the IoT market is projected to beat PCs in 2014 and smartphones next year, and eventually grow as the largest sector among Internet-connected devices after 2015.
Market research firm Gartner also predicts that the number of IoT devices will reach 26 billion units in 2020, nearly a thirty-fold increase from the 2009 forecast of 900 million units.
The growth of IOT is getting a lot of attention in the industry, since it can serve as an opportunity to create a new profit model based on existing products and services, or to fundamentally improve work efficiency. In addition, many companies anticipate that IoT will play a role as a service platform that outperforms PCs and smartphones.
Last year, the market research firm Economist Intelligence Unit reported that more than 3/4 of global multinational enterprises are aware of the importance of IOT, running personnel or business units related to the field, and applying the sector to their new businesses.
The recent rapid growth of IOT is attributable to a sharp decline in costs needed for related infrastructure and devices. For instance, the cost of RFID tags that are used for asset verification and inventory management dropped about 40 percent year-on-year. The costs of sensors for acceleration and situation recognition have also decreased by around 80 percent for the past five years. In particular, IT experts say that since related parts are mass-produced with the popularization of smartphones, it is possible to supply parts that provide various functions with smaller sizes at previously unimaginable prices.
Currently, Google is accelerating its move to dominate the global IOT market. In December 2013 it bought robotics engineering company Boston Dynamics, and also acquired home gadget maker Nest Labs for US$3.2 billion in January this year. Industry analysts are forecasting that with the takeover of the two companies, the global technology leader will come up with an IOT solution that combines household appliances and robots, based on its newly-acquired technologies.
Google is not alone in the effort. Other multinational corporations are also rapidly responding to promising IOT. VMware purchased AirWatch, a provider of mobile device management (MDM) software and standalone management systems, for US$1.5 billion in January. Last year ARM, a leader in microprocessor Intellectual Property, also bought Sensinode Oy, a provider of software technology for IoT.
An industry source said, “The potential of the IOT lies in the fact that it can be used in new fields. And it can be connected with existing smartphones, PCs, and smart homes as well.” The source added, “Global IT companies invest in related businesses to gain influence as a platform like Microsoft’s Windows and Google’s Android.”