Where is the Internet of Things heading in 2016?

Where is the Internet of Things heading in 2016?

Businesses will look into using sensor or steaming data to predict customers’ movements and decisions in near real time

The Internet of Things next year will evolve to move beyond the household with an emerging consumer interaction segment, and people will turn their attention to the smartphone as an IoT sensor device, according to analysts.

Gartner’s Kristian Steenstrup said a 'consumer interaction' IoT trend will become more visible next year. He played out a scenario of a retailer placing movement and context-aware sensors around its stores to detect how customers are moving in the shop and interacting with products.

“Here’s a person, they walked around and looked at these things and we know from their mobile phone they may have been searching for X, therefore let’s change the advertising or draw their attention to some offer,” Steenstrup said.

He said next year more customer-service orientated businesses will look into using sensor or steaming data to predict customers’ movements and decisions in near real time to better respond to them.

The smartphone will also be seen as more of an IoT device for consumer interaction, as it contains sensors that capture data on the individual user, with users constantly interacting with their device.

“A lot of those free Wi-Fi [services] that we can use when we are in stores actually aren’t there because they think more people will go to a shopping mall if there’s Wi-Fi," he said.

"They are actually there, so that they can track mobile phones in everybody’s pocket - not identify individuals because that’s illegal - but they can identify that this unique phone has been in the mall every three weeks on a Monday afternoon at 2:00pm.

“They know that devices has been in certain places. But it gives them a better idea of what is going on inside the mall and store, [so they can] improve their offers and tailor them better to people,” Steenstrup said.

Joe Sweeney from IBRS also sees the mobile phone being used as more of an IoT device next year. He said the “massive amounts” of data phones generate will be mined by companies or researchers to deliver better services – for example, using smartphone sensors to detect health conditions of individuals.

“You’ve always got your phone with you, and they are heavily instrumented, you can get temperature on them, detect location, movement, etc. So the phone is both a recipient of information, and also a good collection point - it becomes a very powerful tool or receiver for the Internet of Things,” he said.

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Sweeney also said the IoT will move beyond the household next year, as that has already been hyped up enough this year. Sensors to help manage infrastructure and resources for cities will become more apparent than in 2015.

“Some cities around the world have been able to reduce their water wastage through leakage detection with instrumented pipes and so forth by up to 17-18 per cent. Hong Kong is an example of that. This means that Hong Kong could delay the building of additional water capacity by 20 years.

“So you look at those sorts of use cases, and we are talking about relatively small investments, if you applied that to Australia there’s big stuff to be gained from connected and monitored systems or the Internet of Things,” Sweeney said.

However, Serene Chan from Frost & Sullivan, takes a different view. Chan said IoT in homes will witness enormous growth next year, with it moving beyond IoT and wearables for tracking people’s physical conditions to driving more efficiencies around the home.

“Greater awareness will be driving consumers' spending on compatible household devices that come with a proprietary software lock-in. An example will be Google Nest that provides a smart thermostat," said Chan.

“And standalone products will start coming together to support an integrated consumer lifestyle in an autonomous manner. So for example, a tie-up between Jawbone and Nest will bring about an automated adjustment in room temperature based on the physiological condition/activity captured by the wearable accelerometer.”

When it comes to standardisation and interoperability among different devices, Sweeney said industry APIs will play a great role in that, where various devices, no matter how they are communicating, will pump data into shared databases and help create a data ecosystem.

Chan said the IoT will still be dominated by cellular technology, as it’s already entrenched in machine-to-machine connected devices in logistics, transportation and retail.

“However, it will face increasing competition from vendors and players outside of the telco arena that develop their own solutions using low power narrowband networks which use unlicensed and spectrum-free bands.

But that it is still highly fragmented, so cellular technology will remain the dominant one next year,” Chan said.

Mark Koh, a research manager from Frost & Sullivan, said there will be increase in collaboration among cloud vendors, as well as IoT and big data vendors, to provided integrated IoT solutions.

“The trend of big data in IoT will grow as companies increasingly incorporate IoT in their business. There will be an increase interest in real time management and analysis of streaming IoT data as companies try to leverage and monetise this data,” he added.

Chan said more businesses will look to IoT devices and sensors to better compete and differentiate themselves in the market, as physical assets no longer generate growth.

“For example, instead of selling products like vehicle tyres, companies can rent out tyres to fleet operators and charge them based on their mileage. The pricing mechanism is made possible because of the use of sensors and GPS.

“However, business models and IoT solutions are something that can be easily copied by competitors. So how sustainable these models are is something that must continue to evolve and companies must continue to reinvest in R&D and marketing as their core assets rather than investing in physical assets which no longer generate the kind of growth that we saw in the past.”

IoT in 2016 is still set to experience some challenges. Steenstrup said IT folks tend to look at IoT from a technology point of view, but the engineering and physics of physical objects are just as important to making it work.

“Because you are dealing with objects you need to as an IT person start to work with engineering and product group. When you are dealing with things, physics matter and engineers are very good with the constraints of physics.

“If we use the example of a drone as an IoT device, it’s got lots of connectivity, a little bit of computer processing power, data capture – it looks like an IT product. But it’s a 10 kilogram flying object that could do some serious damage. So physics matter.

“One of the challenges that companies will need to do is be more cohesive about how they build their IoT team and what people are involved in it because things matter,” he said.

Another challenge is security and developers not taking into account intrusion points. Household objects like toasters and kettles can come across as completely harmless, but the intrusion point to indirectly hack into the home area network can be damaging for consumers.

“There was a bizarre case in the UK recently. The design of it was flawed because they thought who would hack into a kettle so didn’t worry too much about security.

"But what they had done was deliver a new intrusion point into the home, so now the connected kettle which was unprotected was an entry point to home area network and you could actually hack into a consumer’s environment through the kettle,” Steenstrup said.

Lastly, organisations need to start thinking about their end goals and how IoT really helps them achieve that. Too often, Steenstrup said he has seen companies get into the hype but not properly think through how an IoT application will help them achieve what they want to achieve. He cautioned companies not to make this mistake.

“They [organisations] say ‘we are going to get into this Internet of Things bonanza and be part of it’, but they are not actually thinking through are we trying to do it to increase customer satisfaction, increase sale or outreach. There’s not a thought to the platform design, is this going to be industrial and continuous use, or consumer grade and occasional use.

“So it’s working out clearly what you are trying to do. It sounds like it would have been an obvious step, but it is surprising how many companies are just trying things out to see how they work without having a clear goal.”

Check out other trends for next year:

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Tags consumer devicesInternet of Things (IoT)smartphone sensors

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