internet connected devices - ihs markit home page of things (iot): originally a theoretical concept...

Bill Morelli

Associate Director

Internet Connected Devices:

Evolving from the “Internet of Things”

to the “Internet of Everything”

© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent.

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Agenda

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I. Internet of Things Overview Definition

Evolution

Market Size

II. Technology Insights Cellular (WWAN)

Low-Power Wireless (WPAN)

III. Vertical Market Insights Industrial

Medical

IV. Q&A


I. Internet of Things:

Overview

4


IoT Market Definition

Internet of Things (IoT): Originally a theoretical concept for increasing the potential of automating systems by assigning computer data representing the location and status of objects in the physical world. The concept has evolved to include real-time monitoring of people and things to allow for dynamic interaction intended to improve efficiency, productivity, and quality of life.

Internet Connected Device: Any IP addressable device designed with the ability to directly access or be accessed by other internet connected devices. Internet connected devices can range from basic sensor and telemetry devices to powerful computing devices with a full OS and UI.

Wired WPAN WLAN WWAN

Cellular

Satellite

802.11x Bluetooth Classic

ANT

ZigBee

Etc…

Ethernet

Coax

Fiber

Etc…


Application Segments

Automotive

Infotainment, Under-the-hood

Communications, Fixed

Consumer CPE, Enterprise CPE, Last-mile

Access, Backbone

Communications, Mobile

Mobile Handset, Mobile Infrastructure

Computers

Desktop, Server, Portable Computing

(Netbook, Notebook & Tablet)

Consumer

Personal Media Player, Camera &

Camcorder, TV, Set-top Box & DVR, DVD &

BD Players, Major Home Appliance, Home

Automation, Peripherals & Home Office,

Toy, Game Console, Other Consumer

Medical

Consumer Medical, Imaging, Other Medical

Military & Aerospace

Commercial Aerospace, Military

Equipment

Industrial

Drive and Motor Control, Automation, Test

and Measurement, Power & Energy,

Building Automation, Security,

Transportation, EPOS, EFT & ID, Smart

Cards, Other Industrial


IoT Market Segmentation

Node

Endpoint with

limited

intelligence, e.g

RFID tag, sensor

Controller

Intelligent device

with UI, e.g.

smartphone,

tablet

Infrastructure

Devices which

handle data, e.g.

switches, routers


Connected Device Hierarchy

Unconnected Objects: Desk, chair, soda can,

fire hydrant, animal collar, shipping pallet,

buildings, etc.

Unconnected Electronic Devices: Calculator,

streetlight, vending machine, coffee maker,

blood pressure monitor, etc.

Connected Electronic Devices: Bluetooth headset, printer, computer monitor, DVD player, licensed mobile radio unit, etc.

IP-addressable Connected Devices: Tablet PC, smartphone, Infotainment head unit, smart meter, EV charging station, home health hub, etc.

All Objects

Electronic

Connected

IP Addressable

Internet Connected

Closed Network

Non-IP Addressable

Unconnected

Non-Electronic

Tagged

Untagged

Internet of Everything

Internet of Things


Internet of Things Evolution

Internet of Everything (IoE): represents the open access to data from

one or more monitoring and control systems by third-party applications

to provide unique, additional value to stakeholders.

Connect Devices

Collect Data

Access Data

Complex Analytics

Unique Value

• Connectivity

• Intelligence

• Sensors

• Storage

• Cloud

• Standards

• Open APIs

• SECURITY

• “Big Data” Realize the true

potential of a

connected

society….


IoT Forecast, World, 2011 - 2025

World Market for Internet Connected Devices - Installed Base & New ShipmentsConnected Devices (M )

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

0

10,000

20,000

30,000

40,000

50,000

60,000

2011 2012 2013 2016 2019 2022 2025

Military &Aerospace

Medical

Industrial

Consumer

Computers

Communications,Mobile

Communications,Fixed

Automotive

New InternetConnected Devices


Market Drivers & Enablers

Expanding Capacity

- IPV6 Implementation

- Network upgrades (LTE & fiber)

- Efficient/improved Backhaul

- Data Centers

Ultra-Low Power

Very low power processors which can be implemented in a

wide range of industrial (and novel) applications will be

increasingly important.

Market Penetration

As IP-addressable devices become more commonplace and

IoT use cases better understood, the commercial benefits are

expected to drive increased connectivity.


Market Challenges & Restraints

Global Economy: Many IoT initiatives rely on significant

infrastructure investments. The next 2-3 years are expected to

see slow uptake as a result of tighter consumer budgets, a

sluggish housing market, and lower overall Industrial CapEx.

Business Models: A compelling business case with a solid

ROI is required for equipment manufacturers, end-users, or

service providers who are considering investment in the

internet connected devices market.

Security & Privacy: Potential benefits of IoT for consumers

and businesses include more personalized goods and services

– however, to gain user acceptance this information sharing

must balance personalization with privacy, and all must be

highly secure


Cloud &The Internet of Things

Future of the Digitally Connected World Millions of apps, billions of devices, trillions of sensors

Multitude of applications in different markets Key requirements: real time, secure, trusted, synchronized

- Transportation - Safety and security

- Automation and control - Energy

- Health care - Automotive/ Connected Car

- Agriculture - Consumer & Retail

- Electronics & Telecom - Financial

- Government - Power & Utilities

Data from multiple sensors collected in the cloud; analyzed in real time; information provided for decision making Challenge: Create the right business model by understanding the entire

value chain

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IoT Case Study – Smart Port Logistics

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Hamburg’s docks are limited to an area

of 27.8 square miles, yet the number of

containers that pass through each year

is expected to triple from the current 9.1

million.

"Smart Port Logistics", a 3 month joint

pilot project by the Hamburg Port

Authority, Deutsche Telekom and SAP

was launched in 2012.

This solution streamlines flows of goods and keeps up to 40,000 vehicles a

day in check.

Real-time information about freight orders and the traffic situation provided by

an IT-assisted traffic management system.

Optimized flow of goods minimizes traffic jams and waiting times for truck

drivers.


II. Technology Insights:

Cellular

15


M2M Market Definition

Machine-to-Machine (M2M): a communications model that uses various network

connectivity technologies to integrate sensors, devices and machines into applications

that automate monitoring and control functionality, or enable transparent content delivery.

Components &

Hardware

Network

Connectivity Platforms &

VAS

Application

Provisioning

Application Service

Providers (ASPs)

OEMs

Corporate Adopters

M2M Application

Platforms (MAP)

System Integrators &

Consultants

MNOs & MVNOs

M2M Connection

Platforms (MCP)

Chipsets

Embedded Modules

SIM cards

Routers/Terminals


Key Application Segments

Automotive: OEM and aftermarket embedded

cellular connections in cars and light trucks,

targeting consumer use-cases.

Asset Management: Embedded cellular connectivity

for monitoring and/or controlling fixed and mobile non-

vehicular assets.

Digital Signage: Embedded cellular connectivity

for providing content to remote digital signage

displays.

Energy & Utilities: Embedded cellular connectivity

for enabling utility smart grid infrastructure

deployments, specifically for electricity, gas, and

water services.

Healthcare: Embedded cellular connectivity for

healthcare-related services offered remotely as

opposed to on-site in a medical facility.

Retail & Payments: Embedded cellular connectivity

for enabling for enabling payment processing and

self-service retail applications.

Security: Embedded cellular connectivity used as

either a primary or secondary connection for home

and small business security alarms, managed home

automation services, and video surveillance.

Transportation: OEM and aftermarket

embedded cellular connections in fleet vehicles,

tractor-trailers, and public transportation.

Routers & Terminals: Cellular connectivity used in

router, gateway and terminal form factors primarily

for telephony, business continuity and mobile field

service.


Cellular M2M Forecast, World, 2010 - 2016


Market Drivers and Challenges

Drivers & Enablers

MNO “push”: Strong market push by MNOs to evangelize the M2M market and coordinate value chain efforts.

“Pull” from corporate adopters and OEMs: The increasing desire of companies to use embedded cellular connectivity offer new services, increase efficiencies, or comply with regulations.

Cheaper modules: Declining module prices due to overall commoditization trends, pressure from Asia-based module suppliers, and MNO supply-chain coordination.

Cheaper connectivity: As needed, a willingness by MNOs to price connectivity to meet the demands of specific industry verticals, such as energy.

Enabling platforms: Development of third-party connection management, device management, and application development platforms, which serve to decrease application development time and cost, and facilitate on-going application management.

Regulations: Government regulatory and legislative initiatives, in areas such as automotive safety, energy efficiency, Smart Cities, and IoT.

Standards: On-going standardization initiatives.

Challenges & Restraints

Application complexity: Continuing complexity of M2M application development, which raises costs and increases time-to-market.

No horizontal service layer standard: Current lack of broad horizontal service layer standards.

Ecosystem uncertainty: Specifically around remaining expected deployment lifespan of 2G networks.

Security concerns: Especially in regards to critical infrastructure and consumer privacy.

Complex business/revenue models: Issues remain to be addressed, such as physician re-imbursement for telehealth services and US utilities’ regulated return-on-invested capital revenue model.

Supplier fragmentation: At key segments of the value chain, particularly for software platforms and VAS.


II. Technology Insights:

Low-Power Wireless

20


Low-Power Wireless – Key Applications

Automotive – remote/passive keyless entry,

tire pressure monitors, sensors Consumer Electronics – TVs, set-top boxes, DVD

& Blu-Ray players, PC peripherals, remote controls,

active 3D TV glasses, games consoles and games

controllers

Residential Automation – home monitoring

devices (remote control sensors, window/door

contacts, door locks, other safety and security

devices), energy management devices

(programmable thermostats (PCTs), other

HVAC controls, etc.

Process and Discrete Industrial – Programmable

Logic Controllers (PLC), Distributed Control Systems

(DCS), Remote Terminal Units (RTU), Process

Controllers, Motion Controllers, Servo Drives, Inverter

Drives, etc.

Consumer Health Monitoring – blood-pressure

monitors, blood-glucose monitors, pulse oximeters,

weight scales, implantable devices, body fat analyzers,

and others

Sports and Fitness – include heart-rate monitors,

pedometers and activity monitors, footpods, wrist-worn

speed/cadence sensors, and cycling computers

Smart Meters, Backhaul & Gateways – Smart

electricity meters, energy management

gateways, backhaul devices.

Commercial & Municipal – programmable,

configurable and fixed function controllers,

programmable logic controllers (PLCs),

environmental sensors, lighting controls (both

commercial building based and street lighting),

etc.

Asset Tracking – Asset tracking devices, readers

and hubs.

Others


Low-Power Wireless – Technologies

ANT

Bluetooth Smart

(v4.0 single-mode)

ZigBee PRO; ZigBee RF4CE;

ZigBee SE2.0; ZigBee Multiple

EnOcean

Low-Power Wi-Fi

ISA100.11a

WirelessHART

Other 802.15.4; Other 2.4 GHz; Other Sub 1-GHz

Z-Wave DECT ULE


Low-Power Wireless - Key Use Cases

Bluetooth Smart

• Key Consumer Electronics

(IR Replacement/PC Peripherals)

• Consumer Health Monitoring

• Sports and Fitness Monitoring

• Automotive

(Remote/Passive Keyless Entry)

• Other Applications

(Toys, Games)

ZigBee PRO/RF4CE

RF4CE


(IR Replacement)

PRO

• Smart Meters

• Residential Automation

• Lighting Controls

• Commercial & Municipal

Automation

• Asset Tracking

Other 2.4 GHz


(PC Peripherals)

• Sports and Fitness


• Lighting Control

• Asset Tracking

Other Sub 1-GHz

• Commercial & Municipal

Automation


• Process & Discrete Industrial

Automation

• Automotive

• Other Applications


Low-Power Wireless – By Application

• Consumer electronics will continue to be a

key market for low power wireless

technologies throughout the forecast

period.

• The single largest driver is the smartphone,

which is increasingly is being used as a hub

for a wide range of low-power wireless

equipped devices.

• Other market segments which are forecast

to drive growth include:

• Automotive

• Smart Metering


• Sports & Fitness Monitoring

Low-Power Wireless Technology - By Application000's Unit Shipments

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2018

Key ConsumerElectronics

Other Applications

Automotive

Smart Metering

Asset Tracking

Commercial Building &Municipal Automation

Residential Automation

Sports and FitnessMonitoring

Health and Wellness

Process and DiscreteAutomation


Low-Power Wireless – By Technology

• Bluetooth Smart is projected to see the

largest volume growth overall between

2012 and 2018

• Other technologies which are forecast to

see significant increases include:

• ZigBee RF4CE

• ZigBee PRO

• Z-Wave

• EnOcean

• Some of the key use cases driving this

growth include consumer health, sports &

fitness, residential automation, and

consumer electronics.

Low-Power Wireless Technology - By Technology000's Unit Shipments

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2012 2018

ANT | Proprietary

ISA100.11a

WirelessHART

ZigBee Mulitple

ZigBee SE2.0

ANT | Bluetooth

DECT ULE

ANT

EnOcean

Other 802.15.4

Low-Power Wi-Fi

Z-Wave

ZigBee PRO

ZigBee RF4CE

Bluetooth Smart

Other Sub GHz

Other 2.4 GHz


Low-Power Wireless – Vertical Insights

Consumer Health Monitoring

• Increase in connectable devices: Mobile handsets are adopting low-power wireless technologies such as Bluetooth Smart Ready (and even ANT, albeit to a limited degree), driving consumer medical device manufacturers to do likewise. This allows users to track and record their own medical readings.

• Bluetooth Smart to become the most utilized: Bluetooth Smart is projected to be the most utilized low-power wireless technology in the consumer health monitoring space. This is due to adoption in devices such as cellular handsets and mobile computing devices, and also the support it has achieved from health device manufacturers such Qualcomm and Numera, who are pushing the technology in the telehealth space.

• Consumer Health to push adoption of wireless: Consumer health monitoring is forecast to account for the largest number of devices shipped (despite lower overall wireless penetration than telehealth) as device OEMs pursue the consumer market while business models for the telehealth market continue to be developed.

Sports and Fitness

• Development and use of smart phones: One of the key drivers is the uptake of low-power wireless technologies such as ANT and Bluetooth Smart in the smartphone, which allows device manufacturers to take advantage of apps which can track sports performance. This gives the consumer the ability to upload results to a cloud based service while still being mobile.

• ANT and Bluetooth Smart to be most adopted: ANT and Bluetooth Smart are projected to be the most utilized low-power wireless technologies between 2011-2018. ANT is expected to ship more devices initially, however Bluetooth Smart shipments will after 2016 as a result of the uptake of Bluetooth Smart in cellular handsets, and the native support that will be available at that time for Bluetooth Smart devices.

• Mobile operating systems critical to Bluetooth Smart growth: Currently, only iOS natively supports Bluetooth Smart devices, with Android providing report by manufacturer specific APIs. Windows Phone 8 and BlackBerry 10 do not currently provide native support. Both Windows Phone 8 and Android are projected to finalize Bluetooth Smart support in 2013.


Low-Power Wireless - Vertical Insights

Residential Automation

• Support from managed service providers: Several managed service providers such as ADT, AT&T, Verizon, and Orange are pushing managed home automation systems which utilize low-power wireless technologies, driving the adoption of these technologies in the residential automation space.

• Z-Wave & ZigBee most adopted in the Americas: Z-Wave & ZigBee are projected to be the most adopted low-power wireless technologies within the cloud-based home control space in the Americas region. This is due to support from managed service providers within this region.

• Smart Grid acts as a driver for ZigBee: Due to the uptake of ZigBee in smart meters in North America, many suppliers of potential demand-response or ‘HAN’ devices (ranging from in-home displays to smart thermostats) have opted for ZigBee connectivity. This has also driven support from service providers looking to integrate ZigBee into home automation systems. ZigBee PRO is projected to be the most utilized technology in the energy management space.

Key Consumer Electronics

• IR replacement: One of the biggest drivers in the consumer electronics space, is the replacement of IR in remote controls with RF technologies such as ZigBee RF4CE and Bluetooth Smart. RF provides many benefits such as “out of line of sight” control, advanced gesture based control and additional features such as streaming or voice based control. ZigBee RF4CE is projected to see the most significant uptake in this area.

• Uptake of low-power wireless in PC peripherals: Proprietary 2.4 GHz is the dominant technology in the PC peripherals space through the forecast period. However, its market share is threatened by Bluetooth Smart, driven by the uptake of Bluetooth Smart Ready ICs in computing devices, such as laptops, tablets, and desktop PCs. Bluetooth Smart PC peripherals are projected to account for more than 10% of devices shipped in 2018.

• Uptake of 3D TVs driving active 3D glasses: The uptake of 3DTVs is driving the uptake of low-power wireless technology as connectivity between active 3D glasses and 3D TVs is required. Bluetooth Smart is projected to see the most uptake in this area.


III. Vertical Market Insights:

Industrial

28


Industrial – Installed Base

29

• Although many of the market

subsectors have smaller volumes

than in the large telecom and

consumer applications; the whole of

the industrial sector still represents a

significant opportunity for IP

addressable devices.

Industrial - Internet Connected Devices - Installed Base by Connectivity 000s of Connected Devices

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

2011 2012 2013 2014 2015 2016 2017

WWAN

WLAN

WPAN

Wired

• Diversity drives the connectivity

solutions which are found in the

industrial sector.

• The most significant challenge is

that many applications are too

specific to support large

economies of scale.

Industrial - All Devices - Installed Base by Category - 2017

Building Automation

Commercial Transportation

EFT-POS, Smart Cards

Industrial Automation

Lighting

Power & Energy

Security

Test & Measurement

Other Industrial


Industrial – New Shipments

30

• A key point that is worth noting is that there is a greater reliance on

WPAN technologies in this sector than in most of the others included in

this report.

• This is closely related to the second key point, which is the much higher

percentage of nodes in both the installed base and new shipments.

Industrial - Connected Devices - New Shipments by Category - World000s of Devices

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2011 2012 2013 2014 2015 2016 2017

Building Automation

Commercial Transportation

EFT-POS, Smart Cards

Industrial Automation

Lighting

Power & Energy

Security

Test & Measurement

Other Industrial


Industrial – Key Trends

31

Overall, growth in the industrial sector is predicted to be strong. This should not be construed as a prediction that manufacturing or commerce is going to grow at a substantial rate. On the contrary, manufacturing and commerce are predicted to be slow and steady globally. However, a trend to seek efficiency in manufacturing and commerce is driving demand for more intelligent strategies which is in turn driving a trend toward connected devices growth.

Part of the strategy for more efficient manufacturing and commerce includes demands for

remote communications, monitoring and control. This trend is related to the growth of

integrated intelligence, sensor networks, asset tracking, internet connectivity, M2M

communications, and energy measurement & management, which in turn is driving growth

in IP connectivity for this sector.

Smart meters (and grid) are a key growth areas. IHS estimates that shipments of basic

meters will continue to decline and those of smart meters will continue to grow quickly. By

2016, shipments of smart meters will exceed those of basic meters.

Smart meters enable additional applications such as consumer reports of real-time energy

usage, connectivity to and control of smart appliances, on-demand consumption polling

and similar applications.


III. Vertical Market Insights:

Medical

32


Medical – Installed Base

33

• Despite the availability in mature economies of many potentially disruptive

technologies in the medical industry, certification and other regulatory

influences ensure safety and reduce issues of liability for the equipment

vendors and their clients partly by moderating how fast new technologies

and procedures are adopted.

• The extremely high volume of consumer medical devices in this segment

result in a very low penetration for connectivity overall.

Medical - Internet Connected Devices - Installed Base 000s of Connected M edical Devices

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2011 2012 2013 2014 2015 2016 2017

Installed Base -Medical

Total ConnectedMedical


Medical – New Shipments

34

• Wired technologies are forecast to

remain the most widely

implemented in the initial years of

the forecast period.

• WLAN and cellular technologies

will start playing a more important

role in connectivity for medical

devices later in the forecast period,

however the penetration rates are

expected to remain fairly low.

• WPAN technologies will see a steady increase

throughout the forecast period, largely driven by

consumer medical devices.

• Increasingly affordable sensors are also expected

to be a driver. The combination of inexpensive

sensors and WPAN will allow for better real-time

monitoring of chronic care patients without

sacrificing quality of life.

Medical - Internet Connected Devices - New Shipments by Connectivity000s of Connected Devices

0

20,000

40,000

60,000

80,000

100,000

120,000

2011 2012 2013 2014 2015 2016 2017

WWAN WLAN WPAN Wired


Medical – Key Trends

35

Devices designed for home medical use,

especially devices with connectivity

where data can be sent to a remote

clinic, are predicted to substitute for a

lack of resources in a few emerging

economies.

Interest in consumer healthcare is rising quickly, but does not always translate to growth in

the market for consumer healthcare equipment. Smartphone apps are increasingly serving

as substitutes for consumer health equipment. This is especially true outside the mature

economies, as the use of smartphones as diagnostic equipment is less regulated and

where smartphones are more available than consumer medical equipment.

A small, but the fastest growing, market is for patient-worn telemetry. This is another

example of the trend to facilitate patient independence and free up prime patient care

space through the use of connectivity and mobile technologies.

During the recession, many institutions delayed replacing this equipment. Unlike many

other markets that saw a steep rise in 2010 and 2011 to correct an extended replacement

schedule, the whole medical sector is predicted to slowly return to normal replacement

rates over the forecast period.


IV. Q & A

36

© 2013 IHS. No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent. 37

Bill Morelli – Associate Director M2M & Internet of Things

+1 (512) 582-2010

[email protected]

Tom Hackenberg - Principal Analyst MCUs and DSPs

+1 (512) 582-2013

[email protected]

internet connected devices - ihs markit home page of things (iot): originally a theoretical concept...

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