Benchmarking the Internet of Things for high growth: Industry analysis
As more business leaders work on their strategies for the Internet of Things (IoT), industry analysts are researching use cases for these technologies. Having evaluated similar technologies in the past, one of the most successful devices was deemed to be the anti-theft tag known as electronic article surveillance (EAS).
That's because it's disposable and some major retailers around the globe believe that it deters thieves. Over ten billion EAS tags are produced yearly, mostly sold at around one cent with 0.5 cent ones available from several vendors, according to the latest market study by IDTechEx.
Lessons learned from past experience
Next comes disposable radio frequency identification (RFID) tags which help stock control at around eight cents apiece. There is one standard portfolio for the highest volume applications. Both EAS and highest volume RFID took at least 20 years to get there.
Then comes mobile phones which are not disposable but they are mostly replaced within two years. EAS, RFID and mobile phones are not hard wired so there are no delays and costs from that but they all need infrastructure, in the case of mobile phones, widely deployed infrastructure.
The EAS and RFID systems are usually operationally closed systems - only one service provider accesses them so their security is not a serious issue. The phones are on more open systems and they are largely insecure but that has not impeded sales.
Internet of Things nodes constitute IP addressed things that collaborate with things using the internet. The nodes that are operationally suitable for widespread deployment are tens of dollars each, though they can be one or two dollars if improved and sold in very high volume.
If they are to be sold in tens of billions yearly they need to be ultra-low power and disposable. As an example, they will probably be self-fit - in other words, use cases such as dropping them from a helicopter onto forests for fire monitoring, onto mountains for snow avalanche monitoring, or for tracking oil slicks at sea.
Quest for profitable use cases continues
According to the IDTechEx assessment, self-organizing, self-healing wireless sensor networks (WSN) have not proved to be sufficiently scalable, due to power consumption and short range, so star extensions to the internet are now being introduced.
Meanwhile, governments are investing in IoT to solve the software and systems challenges, without deploying the high-volume systems. For example, the UK Government $38 million investment in IoT will enable the business community and the public sector to build their basic capability - specifically in areas such as security and trust, data interoperability, investment justification and design development.
That being said, nodes may need to be under one dollar, and Chinese vendors show every sign of achieving that cost reduction goal. However, to date, no profitable application with very high volume has been proven. Nonetheless, IDTechEx still forecasts a $20 billion market in 2020.
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