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Gear Up to Seize the IoT Business

By Vincent Wang
Published: Dec 11,2014

Internet of Things (IoT) has no doubt that will be one of the next big things, IC design, wafer foundry, or end device providers all aim at the IoT market. Taiwan's leading electronic and information technology (IT) companies are gearing up to seize the chance offered by the coming era of IoT. Experts said that car, wearables, smart home, and robots are the main driving forces of IoT.

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The Technology Behind IoT

The Industrial Economics & Knowledge Center (IEK) stated that under the concept of everything goes online, how to transfer data into information is significant.

IoT is the interconnection of uniquely identifiable embedded computing devices within the existing Internet infrastructure. Therefore, IoT is expected to offer advanced connectivity of devices, systems, and services that goes beyond machine-to-machine communications (M2M) and covers a variety of protocols, domains, and applications.

Things, in the IoT, can refer to a wide variety of devices such as heart monitoring implants, biochip transponders on farm animals, automobiles with built-in sensors, or field operation devices that assist fire-fighters in search and rescue. Current market examples include smart thermostat systems and washer/dryers that utilize wifi for remote monitoring.

IoT Business Module

Let's talk about the IoT business model. In order to fully undertand the IoT business model, the value creation and value capture are needed to be define.

Firstly, the customer needs were solving for exisitng needs and lifesyle in a reactive manner, it will be addressing real-time and emergent needs in a predictive manner in the IoT era.

Figure 1 :   Structure of IoT
Figure 1 : Structure of IoT

Secondly, the offering was stand alone product that becomes obsolete over time, it will be product refreshes through over-the-air updates and has synergy value. Thirdly,the role of data was single point data used for future product requirements, it will be information convergence creating the experience for current products and enables services in the future.

Different Value Capture

On the value capture part, Firstly, the path to profit is changing from selling the next product or device to enabling recurring revenue. Secondly, the control points were jumped from potentially including commodity advantages, IP ownership, and brand to adding personalization and context, network effects between products.

Last but not the least, the capability development was leverage core competencies, existing resources and processes, and it's turning into understanding how other ecosystem partners make money.

The Current Taiwanese and the World IoT Supply Chains

MediaTek is one of Taiwan's top integrated circuit design providers, plans to focus on next-generation wearable devices, such as smart eyewear, watches and wristbands. The company will cooperate with IT industry leaders including Google.

“The Internet of Things, smart home technology and wearable devices will drive the next wave of development in the electronics industry,” said Morris Chang, Chairperson of Taiwan Semiconductor Manufacturing Co. (TSMC) The Chairperson added that his company will concentrate on upgrading manufacturing process and sensor component technologies.

Based on US-based research firm Gartner, the IoT installed base, excluding PCs, smartphones and tablets, will reach 26 billion units by 2020, up from 900 million in 2009. Revenue from related product and service suppliers is projected to top US$300 billion by then, with end markets worth $1.9 trillion global.

Acer and ASUS are also seeking to revamp their hardware, software and service products to profit from the industry's paradigm shift. At the same time, major local telecommunications operators Chunghwa Telecom, Far Eastone Telecommunications and Taiwan Mobile will provide enhanced network infrastructure to support the transformation.

Figure 2 :   Technology structure of IoT
Figure 2 : Technology structure of IoT

Tsay Ching-yen, the Chairperson of Industrial Technology Research Institute (ITRI) said Taiwan remains well-positioned for IoT, because it will need more than 10 billion connected devices transmitting data back and forth, far exceeding the demand for personal computers and smartphones.

Xie Meng-xuan, Analyst of IEK indicated that the purpose of IoT is to collect data from sensors everywhere, and transfering it onto the cloud then to be analyzed by big data, finally taking actions concerning the safety management or emergency management.

Xie Meng-xuan added, as time goes by, and the advanced of technologies, the sensor technology made progress from the single sensor parametric measurement to multi-functional sensor module, which has become the transition turning point of component firms. She expressed that the strategic alliance between firms to form the integration and application of

multiple sensor technology in the future.

Taiwan's “103IT Month” electronics fair, was launched on November 29 highlighted applications involving IoT. As well as the integration of different platforms plays an important role in IoT, the IT Month organized a experience zone for Acer BYOC and the integration of multi-functional platforms of ASUS.

Acer BYOC can be connected through mobile devices, and accessed to data that that is the so-called Peer-to-Peer (P2P). ASUS's the integration of multi-functional platforms allows Android and Windows users to breakthrough the barriers of dual system.

Futhermore, at the innovation and application zone, where the smart shop, brain waves, smart home, smart lighting control. For instance, the smart bed that its height and comfortableness are adjustable, Bluetooth light bulb with its 160 thousand ways of of lights.

Figure 3
Figure 3

William Liang, former Senior Director at innovation Digital System Business Group (iDSBG) System Software Division Operating System Department of Hon Hai Technology, forcast that small components firms will rise in the IoT era, and the integration and cooperation between component firms will be commonly seen in the near future.

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