Changing Paradigm
The Internet of Things (IoT) market will grow rapidly for the next six years. Over US$5 trillion in growth is expected.
Especially as it is linked with primary and secondary industries such as agriculture and manufacturing, the IoT will change the entire business paradigm. On August 10, a market research company IDC forecast that the IoT market, which was US$1.9 trillion size last year, will grow to US$7.1 trillion by 2020, through its report “Internet of Things 2014-2020 Forecast.” The IDC also mentioned that companies who understand the characteristics of the IoT and apply it to existing industries will have a competitive edge over other companies.
The IoT has been considered to be as one of the new technologies led by some IT companies so far. Regardless, IDC commented that the IoT is not a temporary trend, but a critical turning point to change the overall industrial structure.
The IDC projected that the IoT market will grow 13.5 percent per annum from 2013 to 2020. IDC forecast that the IoT is the third innovative platform following the Internet and smartphones, and borderless competition among existing hardware companies and software companies will be enhanced in an IoT ecosystem.
The software industry predicts that Google and Apple, which have already established a mobile ecosystem, will fight against each other fiercely in order to create their own IoT markets. Two companies have moved from the corporate market, which they have been focusing on so far, to households, and are competing in the smart home market. Google is emphasizing an automatic air conditioning system inside houses after acquiring NEST, a company specialized in smart homes, and Apple will soon introduce a network protocol for smart homes. Integrated with IoT, the agriculture and manufacturing industries will have higher productivity and low defect rates. In agriculture, crop-related changes will be monitored in real time so that the negative effects could be minimized. In the manufacturing industry, defect rates will decline through collecting relevant information.
As the border between hardware and software disappears, major companies will compete fiercely over IoT standards. Samsung Electronics has formed the Open Interconnect Consortium (OIC) with Intel, and LG has created the Allseen Consortium with Qualcomm to predominate IoT standards creation. Broadcom and Dell are participating in OIC, and Microsoft, Sysco, and Panasonic joined Allseen.