By now you have probably heard of the Internet of Things many times.
But you may not yet understand what it is. Maybe the simplest way to think about it is realize houses and other buildings are going to become much smarter and more connected over the upcoming years. You may have already seen this with thermostats.
While many don’t understand the Internet of Things now they will soon as growth is predicted to be tremendous.
Business Insider predicts that connected home device shipments will increase at a compound annual rate of 67% over the next five years (this is faster than smartphones or tablets). This results in an astounding 1.8 billion units they are predicting to be shipped in 2019. They describe connected home devices as all smart appliances (such as washers or refrigerators) and energy related devices such as smart thermostats and smart lighting.
In terms of sales, connected-home device sales will account for over $61 billion in revenue this year, but that number will skyrocket at a 52% compound annual growth rate to $490 billion in the year 2019.
There are great opportunities for forward thinking businesses.
But how do you seize your opportunity?
Start by evaluating the market to look for opportunities that overlap with your business capabilities. Many businesses will have new opportunities where they can extend their products and services in a meaningful way into their consumers homes. For instance, look at Amazon’s Dash Button that lets customers order Tide, Glad trash bags and more than 250 other brands with the touch of a finger.
Are their area of your business that overlap with the opportunities presented by the Internet of Things? Sometimes the answers aren’t always obvious, try to think out side the box and see if you can find a connection that isn’t necessarily the first and most obvious idea. Perhaps speak with an iPhone application developer or Android application developer to see if they have ideas of how to integrate external devices with mobile applications and your products. Application developers are are the front lines and understand the industry trends.
Once you identify areas of opportunity remember that it is all about the execution.
How do you make your idea the most user friendly? How do you make your user experience intuitive? Do you have the feature set and hardware that is right for your opportunity? Are you giving your consumers what they want? or will your idea fall flat because you failed to consider how your customers interact with your brand?
Having and idea is only part of the battle as execution is essential.
Photo: Scott Cawley (Flikr) http://bit.ly/1QXavNW
In a recent survey by eMarketer, they predict that by the end of 2014, 1.76 billion people will own and use smartphones. This is more than 25% higher than the number using smartphones in 2013. The market doesn’t show any signs of slowing either. eMarketer estimates that by 2017 over 1/3 of of the people on earth will be smartphone users.
Smartphones and their usage have already substantially pervaded the user base in many countries and by 2015 more than half of the population using smartphones and mobile applications in 15 countries. South Korea had the deepest smartphone penetration, where smartphones were used by more than half the citizens in 2012. Australia followed surpassing 50% in 2013.
Western Europe is the region with the second highest number of smartphone users (behind the Asian market), with 196.6 million smartphone users in 2014. By 2015, most of Western Europe will be using smartphones. The US will also reach 50% smartphone use this year and for the next few years the US will remain the second-largest smartphone market worldwide, behind China.
As smartphone hardware use continues to expand, mobile applications continue to grow as well. Gartner recently predicted that global revenue from the app stores is expected to rise 62% this year to $25 billion.
“We are expecting to see solid growth in the applications market as we are now developing apps for tvs and other household devices as well as for mobile devices.” states Kimber Johnson, Managing Director of Vanity Point. “The industry continues to expand and grow in exciting ways that bring new levels of convenience and functionality to users.”
In the very near future, many of the devices and appliances around homes and offices will be connected via a wireless network and the Internet. Businesses can expect an explosion in the number of intelligent devices and smart applications connected to the Internet. This Internet of Things will create additional information that allows supply chains access to deliver goods and services in exciting new ways they could have only imagined in the past.
Gartner, Inc. recently forecasted a 30X increase in Internet-connected physical devices by 2020 and these devices will significantly alter supply chain information.
The Internet of Things is predicted to reach 26 billion installed units by the year 2020 and its impact may reach further than you think. According to Michael Burkett, managing vice president at Gartner, “Some IoT devices are more mature, such as commercial telematics now used in trucking fleets to improve logistics efficiency, some, such as smart fabrics that use sensors within clothing and industrial fabrics to monitor human health or manufacturing processes, are just emerging.”
As businesses see these capabilities become more common, supply chains will be able to deliver to customers more efficiently. This efficiency will happen when many more smart devices than today are communicating to a network that then creates the appropriate response.
“Smart delivery of goods and services based on the needs communicated through the Internet of Things is the next wave of mobile business and smart applications,” says Kimber Johnson, Managing Director of Vanity Point, “Investment in this area is expected to yield sizable returns.”