There's no escaping talk of the Internet of Things, or IoT. According to some estimates, IoT will become a multi-trillion dollar industry over the next several years, and big hitters like Google (NASDAQ:GOOG) (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Nike (NYSE:NKE), and General Electric (NYSE:GE) are betting it will. But will IoT really take over our lives, as many predict, or fizzle out and eventually become little more than a niche market? We've asked a few Motley Fool contributors for their take on the future of IoT: exploding market opportunity, or a bunch of hype?
Tim Brugger: The question isn't whether or not IoT will develop into a significant market and begin impacting consumer's day-to-day lives: it will, and to some extent already has. Have you checked your home security or turned on lights via a mobile device? Welcome to IoT. The real issue is just how big IoT will become. While estimates vary widely, a recent study suggests the largest piece of the IoT pie lies with smart homes, a market expected to generate as much as $61 billion in revenues this year.
That kind of revenue potential offers a world of opportunity for early IoT smart home players, and the impetus for Google (NASDAQ:GOOG) (NASDAQ:GOOGL) to write a $3.2 billion check for "learning" thermostat and smoke detector maker Nest earlier this year. Here's where IoT market estimates may go a bit overboard. According to that same study, the smart home market alone will grow to a whopping $490 billion in just five years. Not enough hype? By 2019, that $490 billion in smart home sales will represent a mere 27% of the IoT market as a whole.
In other words, before the end of the decade IoT is expected to become a nearly $2 trillion market as Google and others inter-connect our cars, homes, appliances, phones, tablets, PCs, and virtually every other device around us. That's a herculean-sized effort in the next five years, as are expectations the IoT market will grow to 30 times its current size. IoT is real, and industry leaders like Google are poised to cash in, as are long-term investors. But can IoT actually deliver on the kind of growth rates being bandied about? No, that's a bunch of hype.
Anders Bylund: Anyone who tells you the Internet of Things won't matter is probably trying to sell you something. I mean, you're most likely talking to a peddler of buggy whips, VHS players, or medicinal tobacco. This technology is already changing the world, whether you like it or not. So you might as well take advantage of the unstoppable sea of change.
The IoT is actually a very simple idea. Machines can talk to other machines with minimal human intervention. This way, data stores way too large for human-powered analysis can find a new and much more prosperous home, and tedious processes can be automated.
Automation is a game-changer. The history of humanity can be boiled down to a sequence of better tools. Taming fire elevated us from the animals. Steam power and electricity helped us build things faster, and the Industrial Revolution was born. Computers tied together into global networks gave rise to the Internet, and now we live in the Information Age.
This revolution is no different. Making machines do data collection and analysis that humans can't handle is the next quantum leap forward. Find a place on this bandwagon, and your business may survive another decade or century. General Electric (NYSE:GE) is betting the farm on data collection, hoping to ride this macro trend better than any of its industrial rivals.
IoT is a raging tide of change that cannot be stopped, only tamed. From earthquake warning systems and hyper-tuned airplane engines to everyday health monitoring tools and smoother financial processes, this technology has likely already changed your life.
And the changes will keep on coming.
Alex Planes: The Internet of Things is not a new phenomenon, since it's a natural extension of chip miniaturization and wireless connectivity. However, it makes sense that IoT should be the unified endpoint of these two technological trends. The broad-based trend toward connectivity and computation known today as "IoT" is going to be huge. That doesn't mean subsets of IoT won't turn out to be embarrassing fads.
I've viewed wearable computing, particularly smartwatches, with a degree of skepticism since rumors began that Apple (NASDAQ:AAPL) was making a smartwatch. Since "smartwatches" became a thing, I've yet to see one compelling reason why they're worth buying. The only significant thing a smartwatch does that a smartphone can't is track heart rate and other basic health indicators -- hardly the killer app the world has been waiting for. If it were, Nike (NYSE:NKE) wouldn't have discontinued the Fuelband.
In fact, the recent obsession with the quantified self has all the markers of a tech fad as embarrassing as Tamagotchi pets were in the 1990s, and smartwatches are the cornerstone. Despite advances made in medical science over the years, there are still a huge number of unknowns and x-factors in our knowledge of how the body really works. Strapping a Dick Tracy contraption to your wrist simply won't make you a more efficient human being. Optimizing human performance will take more than a few sensors, whether they're in your smartphone or part of your workout gear. Genomics and nanotechnology are likely to have a far greater impact on human performance than a smartwatch or a sensored-shirt.
Is the IoT a fad? Certainly not. But the body-monitoring element of the IoT phenomenon is extremely faddish, and will probably fall by the wayside as better technology for optimizing human performance emerges.