If you follow tech news, you've probably heard about the Internet of Things, or IoT. It's essentially the addition of nearly everything around us -- cars, kitchens, factory conveyor belts, shipping containers, jet engines, and more -- to the Internet. Connecting all of these things to the Internet will allow us to collect and analyze data like never before and automate operations. Imagine having your washing machine order detergent for you.
The IoT has a lot of potential to change how companies, governments, and consumers do a lot of things. But don't take my word for it. Check out these amazing IoT predictions:
- The price of connecting IoT devices will be very cheap -- as little as 50 cents per month in some cases.The low cost comes from the minimal transmission data IoT devices need -- about the equivalent of sending one text message per month -- and the ability to work on older 3G networks.
- Cisco Systems (NASDAQ:CSCO) believes the IoT will grow much like the spread of the Internet. Businesses will expand their enterprise IoT footprint first, and then mass consumer adoption will follow. Deloitte says 60% of IoT devices were bought by and for enterprise use in 2015.
- AT&T already connects nearly 6 million cars to the Internet,but by 2020 more than 250 million cars will be connected worldwide.These connected cars will bring new opportunities for software updates, engine notifications, and semi-autonomous and autonomous driving features.That's why NVIDIA (NASDAQ:NVDA) has built a self-driving platform, called Drive PX 2, to test autonomous cars. The company is banking on grabbing a piece of the self-driving market -- which could hit $42 billion by 2025.
- Cisco believes there will be 50 billion IoT devices by 2020,while Gartner (NYSE:IT) thinks there will be 25 billion.Either way, that's a huge increase from the 4.9 billion connected things we had last year.
- Smart cities will become a huge part of IoT growth. One-half of the world's population already lives in cities,and local governments are looking for smarter ways to manage traffic, water and sewer systems, crime, and energy conservation as these populations grow. In 2015, smart cities connected 1.1 billion connected things to the Internet, and that number will climb to 2.6 billion next year.
- While many of us may question why all of these formerly unconnected things need to be hooked into the Internet now, Cisco says we'll soon wonder why they weren't all connected before. That will cause the IoT to become so commonplace that it'll just fade into the background of our everyday lives.
- Connected kitchens will be a huge part of the IoT, according to Gartner. The research firm says the food and beverage industry will see a 15% cost savings in the next four years, as companies use sensors to track food inventory and to generate automatic food ordering.
- The IoT has massive market potential. McKinseysays it'll be worth up to $11 trillion by 2025, and Cisco thinks it'll be more like $19 trillion around that time.No matter which is right, companies will have lots of opportunities to make money from this huge market.
- Smartwatches and other wearable technologies are a big part of the consumer IoT. In 2015, 80 million wearables were shipped worldwide, and it's only going up from there. The number of wearable shipments will skyrocket to more than 214 million by 2019, according to IDC.The Apple (NASDAQ:AAPL) Watch is key driver for wearable tech and already holds 74% of the smartwatch market.
- Smart homes will become an increasingly larger part of the IoT in the coming years, and companies are already starting to enter the space in big ways. Amazon.com (NASDAQ:AMZN) already has its Dash Replenishment Service that allows devices to automatically order home goods when they run out. In fact, new Whirlpool washing machines can already use DRS to order their own detergent through Amazon. Amazon is also using its Echo speaker as a smart-home hub as the company braces for the $58 billion smart home market.
- Despite all of our technology, the U.S. isn't likely to lead the IoT revolution. China already outpaces the rest of the world, and it's expected to continue that position for a while. IoT service revenue in China will hit $41 billion by 2020, the fastest growth by any IoT country, according to ABI Research.
It's clear the Internet of Things is far more than just hype. It's still a little difficult to grasp precisely how the IoT will affect our everyday lives, but technology companies and governments are already taking big steps to make the IoT a reality. And a handful of companies are likely to benefit.
Chris Neiger has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com and Apple. The Motley Fool recommends Cisco Systems, Gartner, and Nvidia. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.