The Rise of Connected Devices

Manufacturing & Resources

Discrete Manufacturing Article

By Rebecca Lambert from OnWindows

In-home internet of things device adoption rates are set to soar in the coming years. We explore what opportunities this brings to manufacturers and how they can deliver connected experiences that provide value to consumers.

Acquity Group’s 2014 Internet of Things Study reports that today, 7% of consumers own a wearable internet of things (IoT) device and 4% have an in-home IoT device such as a smart thermostat or in-home security camera. By 2016, wearable device adoption rates are expected to reach 28% and, within the next five years, nearly two-thirds of consumers plan to buy an in-home IoT device.

“While IoT is still in its infancy, this technology is poised for massive growth in the next decade,” says the report. “We are already seeing computer- and sensor-infused objects in a variety of industries, including automotive, energy, consumer electronics and in-home appliances. As it becomes less expensive to integrate technology into physical objects, we will see more applications and adoption of this technology.”

Indranil Sircar, Director of Microsoft’s industry technology strategy for discrete manufacturing, is not alone in the belief that the rise of IoT presents a huge opportunity for manufacturers. “IoT offers so many benefits for manufacturers, both in terms of market demand for the production of billions of new smart devices, which will generate new revenue streams, but also from the chance to more efficiently track materials and components, leading to better service delivery as well as cost efficiencies.”

While many talk about IoT as a revolution, Sircar explains that it is more likely to come as an evolution. “IoT has arrived and ‘things’ are already being connected, allowing people to harness data to generate new insights, efficiencies and opportunities. Over time, these connected systems will become connected to other connected things, creating more effective solutions delivering significant value to end consumers.”

One key area in which IoT is expected to have a dramatic impact is in consumers’ homes. According to NXP Semiconductors, within five years, most homes will have 200 devices linked to the internet, from light bulbs to washing machines. Earlier in 2014, US home automation and control technology company Insteon integrated Cortana, Microsoft’s Windows phone digital assistant, with its smart products, enabling users to control and monitor their homes via voice commands.

Through the Insteon Windows 8.1 Phone app, users can accomplish a variety of tasks by simply speaking to their Windows phone, such as turning lights on and off or dimming them, locking and unlocking doors, opening and closing a garage door, adjusting the thermostat and more.

“Our long-term goal is to give users complete autonomy over their homes and smart products,” said Joe Dada, Insteon’s CEO, in a press release. “Adding a voice-driven, personal assistant into the mix is just another way that we can make people’s lives easier.”

IoT devices are also expected to become increasingly popular in the wearables space. Microsoft has recently unveiled a new wearable smart band and health platform that aims to make the process of tracking personal fitness easier, more insightful and more holistic. Microsoft Band features ten smart sensors that monitor wearers’ heart rate, calorie intake, sleep quality and more. It also delivers a number of productivity scenarios with smart notifications, including incoming calls, e-mails, texts and social updates, as well as access to Cortana.

Over time, Microsoft Health will combine fitness data with calendar and e-mail information from Office. This will help to deliver insights into fitness performance relative to work schedules and determine things such as whether eating breakfast improves performance.

Sircar explains that products like this will become more widespread as the capabilities to deliver useful insights continue to develop.

“At the end of the day, it is about providing a consumer experience that delivers significant value,” he says. “In the case of Microsoft Band, it’s not just about delivering health insights, it’s about bringing together all of the elements of a consumer’s work and day-to-day life”

Aside from manufacturing these physical connected products, companies will also need to develop services that coordinate and manage the multiple things that consumers will interact with on a daily basis – both at home and at work. In fact, research firm Gartner predicts that IoT will create US$1.9 trillion of economic value add by 2020, and 80% of that supplier revenue will be derived from services rather than products.

“The incremental cost of hardware and embedded software is relatively small, whereas the service and analytics opportunity is much larger,” according to Gartner. “While initially, much of the supplier focus in the IoT markets will be on hardware and software, as business models mature, the market will increasingly be driven by services, including data analytics.”

In the future, as more data is processed and analyzed by smart connected products, the greater opportunities businesses will have to deliver value to their customers, identify trends for further product and service marketing initiatives, as well as help to save on energy use. “For example, as the maturity of cloud based connected consumer devices evolves, more sophisticated tools – such as machine learning – can be applied to vehicle data to develop optimal performance settings and even send control parameters to the car for better performance,” explains Sircar.

Over the next few years, Sircar says that the rise of standards like AllJoin will make interoperability a lot easier to accomplish, allowing more things to become connected to each other, generating greater value for the end user. “It may not be too farfetched to imagine that home appliances in future will be connected to each other and able to send useful insights. So, a refrigerator may be able to send me an alert when I’m on my way home to let me know that I need to pick up some more milk. I believe we’re just at the start of realizing the true potential of IoT.”

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