Thanks to advances in technology and the proliferation of connected devices, the Internet of Things era has arrived.
It's been years in the making but appears poised to go mainstream. According to the consulting firm McKinsey, the number of IoT-connected devices is forecast to hit 43 billion by 2023, almost three times the number of devices in 2018. Companies and consumers are using IoT to control their heating and cooling systems remotely, doctors use it to monitor patients, and manufacturers track products across the supply chain.
There are a lot of reasons why IoT is growing in popularity. Convenience and on-the-go-access are two big ones. But there are also those jaw-dropping reasons that will surprise even the biggest IoT skeptic. Here's a look at four of them.
1. It can help prevent the spread of diseases like COVID-19
The novel coronavirus outbreak is having a devastating impact on people around the globe. Spain, Italy, and France are effectively shut down, and schools and businesses across the United States are closed. The stock market has been whipsawing between huge gains and losses, and the global economy is taking a major hit.
While IoT can't stop COVID-19 (the disease caused by the coronavirus) from spreading, it can be used to prevent future pandemics. In an IoT world outlined by the financial consulting firm Frost & Sullivan, a network of sensors placed throughout the world would be used to monitor individuals for infections, acting as an early detection system. That would reduce uncertainty in the stock market and provide governments with proof to quickly act on and stop the spread.
Implementing this on a global scale isn't likely anytime soon. Some countries, China included, will be able to do it within their borders. Add facial recognition and GPS to the mix, and Frost & Sullivan's global research director for IoT, Dilip Sarangan, says countries would be able to monitor those who have contracted the virus and track whom they come into contact with. That could prevent virus outbreaks from becoming pandemics. "While this may sound like a police state to many, ultimately, leveraging IoT and [artificial intelligence] AI may be the most logical way to prevent highly infectious diseases from spreading rapidly in a world that is getting smaller every day with air travel," said Sarangan in a recent report.
There's a slew of companies that can benefit from these early defense systems, including equipment makers and network operators. In the U.S. the wireless network providers AT&T (NYSE:T), Verizon (NYSE:VZ), T-Mobile USA (NASDAQ:TMUS), and Sprint (NYSE:S) are big beneficiaries as data is transmitted across the world.
2. 5G will proliferate the number of connected devices
With COVID-19 spreading around the world, commerce has come to a screeching halt, and that's particularly true in the smartphone market. Hit by supply chain issues in China and a lack of demand as the number of people in quarantine grow, several mobile-phone-related companies including Apple (NASDAQ:AAPL) and Qualcomm (NASDAQ:QCOM) have issued guidance warnings for their current quarters.
Despite the business interruptions, the buildout of 5G will eventually pick up, driving what is expected to be a huge smartphone upgrade cycle. It's also expected to increase the number of devices connected to the internet, thanks to the speed and security 5G brings. With 5G networks, data can be sent back and forth between millions of devices in seconds, something not possible with existing 4G networks. That will result in billions of new devices outside of smartphones and tablets that connect to the internet.
The melding of 5G and IoT will be behind the adoption of smart cities and connected cars. It will also enable doctors to remotely treat patients and help robotic surgery become the norm. Gartner expects there to be 5.8 billion connected devices by the end of this year. That's up 21% from the 4.8 billion at the end of 2019.
3. More than $1 trillion will be spent on IoT
Love it or hate it, the IoT market is exploding with no end in sight. Trillions of dollars are being spent on IoT start-ups as investors clamor to get in on the leaders of tomorrow. The interest is coming from an array of venture capitalists who are pouring tons of money into the market -- for good reason. According to IDC, yearly spending on IoT is projected to surpass $1 trillion by 2022, growing at a double-digit rate. That bodes well for equipment providers like Cisco Systems (NASDAQ:CSCO). With global traffic poised to triple thanks to 5G, Cisco and its peers will be able to provide the hardware needed to facilitate the movement of the data.
There are a lot of IoT use cases, but the ones drawing the biggest investments are those focused on the business market. IDC projected IoT spending by the manufacturing industry would hit $100 billion in 2019, while production asset management will attract $4.2 billion, smart home $44.1 billion, and freight monitoring $41.7 billion. The areas that are expected to see the fastest growth and thus the biggest investment dollars through 2022 include automation, electric vehicle charging, agriculture field monitoring, bedside telemetry, and in-store marketing, IDC predicted.
4. Most consumers and businesses want government IoT security regulations
The combination of IoT and 5G will transform society for the better, but that doesn't mean it's smooth sailing ahead. There are a lot of security risks to consumers and businesses that can't be left unchecked.
It's something that both businesses and consumers are worried about. According to a recent survey of consumers and businesses by digital security company Gemalto, 90% of businesses and consumers believe the IoT industry should be regulated by the government. What's more, 61% of businesses think IoT regulation should dictate who is responsible for securing the data throughout its journey.
Of the consumers polled, 65% said they are worried a hacker could take over their IoT device. Meanwhile, 60% said they are afraid their data will fall into the wrong hands. Those fears aren't unfounded. Security from Kaspersky Labs spotted more than 100 million attacks on IoT devices in the first half of 2019 alone.
Without a doubt, risks abound as more devices are connected to the internet. But with such wide-ranging benefits and investor interest, even IoT naysayers can't deny the market is poised to explode. Those four jaw-dropping facts alone prove it.