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However, this situation will not arise instantaneously. In the foreseeable decade, the number of smart devices in the average household will only increase gradually. This is because many large-scale home appliances are not regularly replaced.
Even though it will be impossible for the smart home market to have entered a mature state by the first half of the next decade, the production of smart household products is already beginning, and the digital opportunities that these products will bring about are already appearing on the horizon.
Gartner Vice President Nick Jones stated: “We anticipate that every type of household device will have “smart” functionality and possess certain degrees of sensor and information capabilities. In addition they will normally be able to communicate with the outside world using wireless.”
“Higher end devices will be equipped with sensors and be remotely controlled. The price is unlikely to be an obstacle because in the long term, the cost of IoT connectivity for consumer products will gradually fall to around US$1.”
Integration of Cost and Benefits
Coming back to technology itself, for IoT, the structure of terminal systems can be divided into: control/processing, sensor, connection, analog and mixed signals (signaling), and power management. For terminal applications, there is a considerably wide variety, ranging from wearable applications, to smart homes, to smart factories. In fact, all types of industries can all catch the IoT wave.
According to Gartner’s predictions, in 2018 the scope of revenue for the global semiconductor industry is expected to reach US$348 billion, of which IoT revenue will account for US$24 billion. The semiconductor market for IoT household appliances is expected to approach US$5 billion, while the semiconductor market for wearable devices could reach an estimated US$2.1 bilion.
To give an example, STMicroelectronics (ST) is taking the lead in launching the world’s first Cortex-M4 core Microcontroller (MCU) for under US$1. In the past, embedded systems which possessed both floating point calculation and control functions usually required dual-chip collocation in order to be complete. However, although the cost of MCUs were fairly inexpensive, collocation in Digital Signal Processors (DSP) with floating point calculation functionality raised their costs; furthermore, miniature system areas were futile.
The availability of the Cortex-M4 reduces the building cost of the entire system, and ST lowers the selling price, which is the equivalent of reducing the cost of production. This is truly helpful for the sales and popularization of IoT terminals.
Similarly for miniature systems, we can also often see MCU products on the market that integrate wireless transceivers, such as Bluetooth, ZigBee, or Wi-Fi into a single package. The other companies that can provide this kind program are mainly Texas Instruments (TI), ST, and Silicon Lab.
At the same time, these types of components, such as sensors and micro electro mechanical systems (MEMS), can receive all kinds of external analog signals. To go a step further, upgrading people’s user experience or reducing energy losses and upgrading healthcare quality are the amazing types of growth that these components are linked with.
As for terminal applications, it could be said that wearable devices will play a considerably important role for IoT applications. On one hand, they have the capacity for networking, and on the other hand, purchasing price pressures are unlikely to be an issue. Therefore, they have quite strong growth potential.
Market research institution IHS MEMS together with Senior Principal Analyst for MEMS & Sensors and Industrial Electronics, Jérémie Bouchaud have further stated: “The market is highly enthusiastic for the development of IoT and wearable devices. The value of integrating sensors with micro actuators will create more and more related applications and further drive this market’s continual growth.
Nevertheless, according to Moore’s law, Garner predicts that the average sales prices for semiconductor components will continually fall. Taking wearable devices as an example, 8-bit micro-controllers will fall from US$0.6 in 2012 to around US$0.45 in 2018. At the same time, the same state of affairs will also apply to other semiconductor components. Please consult (Table 1).
From this point of view, when the cost of building IoT terminal systems continually falls, this situation will definitely encourage a sharp rise in the willingness to make use of system integration companies. This will also increase the market scope of other related semiconductors.
Besides lower hardware costs, other technological factors that are also driving the actualization of IoT must also be considered. Naturally software is one of them.
In order to speed up the popularization of IoT, processor IP supplier, ARM, provides a free embedded OS especially for Cortex-M core for use with industry-related systems.
In addition, one problem is that currently there is no consensus on IoT standards. Qualcomm, ARM, and Intel have all established their own IoT alliances in hopes of leading IoT development.
Under this state of affairs without a unified standard for IoT, terminal devices have considerable difficulties fully linking and communicating with one another. Even though there are significant technological breakthroughs, there are considerable limits to the benefits that can be produced by IoT.
Institute for Information Industry MIC Senior Industries analyst and team leader Guo Jia-rong stated that because the majority of IoT camps have just sprung up this year, it is impossible to assess which camps have a greater advantage.
However, looking at the numbers of members and the timing of their establishment, it is obvious that Allseen Alliance is the leader in terms of numbers (with 70 member companies), and it was established in 2013, which is the earliest of all the camps. Guo Jia-rong estimates that 2015 will be the earliest that it will be possible to get an elementary view of CES’s or MWC’s development trends.
Objectively speaking, the benefits that will be brought about by IoT are still, to a certain degree, stalled in everybody’s imagination. However, it is certain that the industry changes being brought about by IoT are currently happening.
However, how big these changes will be is completely dependent on technological breakthroughs and diligent efforts in the industrial sector. What is definite is that IoT is in the process of undergoing a quiet transformation and gradually changing both the world and the rules of operations.