With the Internet of Things (IoT), the future has officially arrived and what a wonder it is. Machine-to-Machine (M2M) Networking and IoT are set to transform corporates, consumers and everything in between.
Beyond cutting-edge Research & Development (R&D) in major tech giants like Google, Samsung and Apple, IoT is on the cusp of becoming a practical reality for consumers in everyday life.
Whether it is through internet-connected clothes, smart cars smart fridges, we will see our everyday lives becoming more
interactive and intuitive. Get set for a connected world, it’s closer than you think.
Gartner predicts that revenue from IoT products and services will exceed $300 billion in 2020.
In Australia, M2M is already estimated to be an AUD 350 million market . The 2016 Ericsson Mobility Report estimated the number of cellular and non-cellular connected devices worldwide at 4.6 billion and that this figure would reach a staggering 15.7 billion devices by 2021, with annual growth rates of above 20%.
There is no doubt that Smart Homes and Smart Cities are no longer a fictional notion – and the potential for serious returns cannot be overstated. According to the McKinsey Global Institute report, The Internet of Things: Mapping the value beyond the hype, linking the physical and virtual world may generate up to $11 trillion a year in economic value by 2025. That level of value – including consumer surplus – would be equivalent to nearly 11% of the world economy.
Driving forces behind IoT
There is a range of factors driving the adoption of IoT including:
Explosion of devices
The adoption of IoT will accelerate with the increasing number of connected devices becoming available and we are observing this trend will continue due to the level of investment flooding into the creation of these devices. In parallel, there is continued global adoption of remote devices, smartphones and tablets which act as the personal interfaces to control the connected devices.
By 2020 every single Samsung product will be connected to the Internet of Things. This means any Samsung smart device will have the capability to ‘talk’ to any other branded device in the marketplace
Increasing investment in IoT eco-system
Investment is pouring into the IoT sector as IT and consumer tech businesses create dedicated IoT divisions, incubation hubs and acquire complimentary businesses for their IoT assets. For example Twitter spent AUD197 Million on Magic Pony, an Artificial Intelligence start up, which specialises in machine learning. “Magic Pony’s technology – based on algorithms that can understand the features of imagery – will be used to enhance our strength in live tweets and video” said Jack Dorsey, Twitter CEO and co-founder.
Famous for its commitment to future-planning two decades ahead of the curve, Amazon set hearts racing with its prototype release of Prime Air Drones earlier this year – which are bespoke automated flying delivery vehicles which will deliver packages under 2.2kg within thirty minutes of placing an online order through Amazon.
IoT will be also be driven by the continual improvement of mobile and fixed networks’ coverage and speeds to enable real time data exchange. And the expansion of the global internet footprint will drive an expansion in device connectivity.
This will be assisted by the birth of Narrowband IoT which manipulates a radio spectrum to create low-powered data connectivity thereby reducing consumption in typically power-hungry devices.
A Game Changer for Telco Service Providers?
In short, IoT can offer real opportunities for telecommunications companies such as Optus and their wholesale partners. The potential for new revenue streams is considerable.
There are opportunities for businesses that can evolve and develop new models for specific industries such as vehicular telemetry, health monitoring, consumer wearables and security. For example, take a slice of the smart home market by offering hardware, network access and monitoring services.
Being in the forefront of technology, service providers are in great position to transform their business model and be solution architects. By combining platform functionality, analytics, cloud and mobile services, service providers can analyse and make sense of the massive data volumes coming from the IoT world.
Indeed, IoT may be the key for service providers who look for a strategy to diversify beyond the traditional mobile or fixed services.
To find out more, please read the Optus Wholesale M2M Discussion Paper.