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Today, technical advances such as lower power chips, better connectivity, and advanced artificial intelligence (AI) and machine learning (ML) are opening up new use cases for the Internet of Things (IoT). Applications in healthcare, manufacturing, and transportation are beginning.
A McKinsey report shows that IoT products and services will generate between $5.5 trillion and $12.6 trillion in value by 2030. IoT solutions, however, come with complexities. These range from developing survey tools that provide secure cloud connectivity to generating insights for the end user. Semiconductor shortages and supply chain disruptions caused by the coronavirus pandemic continue to impact suppliers and manufacturers. Different ecosystems, IP, technologies and standards make today’s world of connected devices woefully fragmented and cluttered. And easy, secure product development continues to be a challenge.
To realize the future of the IoT, industry leaders must agree on standards to align device makers and manufacturers. IoT product, software, hardware, and chip makers—whether partners or competitors—must collaborate to create new features, products, and innovations and bring them to market faster.
Drivers of IoT growth
Industrial, commercial and consumer needs are driving IoT innovation: As technological advances open up new use cases, certain key industries are driving growth in connected devices. Factories and human health, for example, account for 36% to 40% of the estimated unlocked value by 2030, according to McKinsey.
Innovations in the four IoT technologies—chips, connectivity, security, and artificial intelligence—are driving down costs and leading to better devices.
Smaller, more efficient processors and wireless components will enable connected devices to further penetrate key markets such as consumer goods, automobiles and transportation, manufacturing and industry, and human health. Improved networks lead to more reliable connections, opening up opportunities for applications that were previously unfeasible.
As interconnected devices prove their worth, demand will continue to grow. Rob Conant, vice president of Infineon’s software ecosystem, which provides semiconductor and software solutions to IoT companies, said IoT applications are expanding in industry after industry. From fleet tracking in the 1980s to industrial manufacturing and smart grids in the 1990s and 2000s. The distribution continues across various businesses:
“Connectivity is expanding into more and more applications: pool pumps are connected, light bulbs are connected, even appliances are being connected,” he says. “So all of a sudden, companies that weren’t traditional tech companies are becoming tech companies because of the value proposition that they can deliver with IoT. It’s a big change in those businesses.”
Download the report.
This content was produced by Insights, the custom content arm of MIT Technology Review. It is not written by the MIT Technology Review editorial staff.
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