The blog post is based on an Internet of Things (IoT) keynote presented by Tyson Tuttle, CEO of Silicon Labs, at 2014 IIC CEO Summit in Shanghai under the title of “How the IoT Will Change Our World.” At the summit, Tyson introduced Silicon Labs’ broad portfolio of energy-friendly solutions for IoT applications and how IoT will impact embedded designers and a wide range of markets, from consumer to industrial.
As the next evolution of computing, the Internet of Things market will be bigger than all previous computing markets.
The desktop market today comprises about a billion devices. This includes all the PCs and various wired devices we have in our lives. PCs were the first 100-million-unit-per-year market in the electronics industry. The average cost for the semiconductors going into desktop PCs at the height of the market was around $300-$400 USD. That was quite a large market at the time.
The handset market was the first one-billion-unit-per-year market for semiconductors. Silicon Labs sold millions of chips into handsets almost ten years ago. Today the mobile Internet is approaching 10 billion units, which means there are more connected devices on the planet right now than there are people.
Industry experts now project that the Internet of Things will surpass 15 billion connected devices by 2015 and will grow to 50 billion connected devices by 2020. And most of these devices will not be conventional PCs or conventional smartphones. They will be smaller and lower cost, and some of these devices will operate and communicate autonomously. This growing web of interconnected devices includes home appliances, security systems, smart thermostats, smart meters, health and fitness trackers, portable medical devices, smart watches and many other products.
Again, Gartner predicts that the IoT will grow to 26 billion installed units by 2020 (excluding PCs, tablets and smartphones) while ABI Research predicts that the total number of connected devices will more than triple to reach 30 billion units by 2020.
Although analysts and other industry experts may differ in their estimates of the size of the IoT market, they all agree that the IoT opportunity is huge. It’s bigger than the smartphone market today, and it’s going to really have a huge impact on the way we live and on our economy.
So what will be the economic impact of the Internet of Things?
The IoT will enable increased asset utilization. It will improve energy efficiency and reduce environmental impacts from our industries and in our daily lives. It will increase the productivity of our industries. It will help us eliminate waste in the supply chain and in logistics and also in our cities as well. It will help improve the customer experience and the quality of life for people everywhere. It will reduce the time to market for all industries.
According to Gartner again, IoT product and service suppliers will generate incremental revenue exceeding $300 billion, mostly in services, by 2020. This will result in an estimated $1.9 trillion (USD) in global economic value-add through sales into diverse end markets in 2020.
Continue to read the keynote: Internet of Things Keynote #4: 2014 Is the “Year of the IoT”
Visit our Internet of Things page to learn more about our low power embedded solutions.