The Internet of Things - The last Article you need to read about IoT!

This article aims to provide the reader with a condensed overview of resources regarding the Internet of Things. I want this to be the one-stop article to extract charts and pictures about the Internet of Things's potential for other articles or presentations to industry leaders.

The IoT market continues to grow at a rapid rate. In May of 2023, IoT Analytics estimated the number of global active IoT connections based on connectivity type. The IoT market experiences one of the highest growth rates over a whole scope of industries.

Besides EVs, AR & VR, AI & ML (which go hand in hand with IoT), and Fintech, no other industries will experience a higher growth rate than the IoT industry.

The Internet of Things compromises many areas like automotive, healthcare, industrial, and retail. Here is an estimated overview of the revenues from the different areas.

The automotive sector realized the advantages of IoT early and invested heavily in digitizing their factories accordingly. Especially with the emergence of electric vehicles and Tesla's heavy focus on automation forced other auto manufacturers to accelerate their digitization efforts to remain competitive in the market.

Overall, the IoT segments differ in their respective growth rates, as depicted in the first graph. The automotive segment is projected to maintain its growth lead throughout 2028, followed closely by Industrial IoT, other IoT segments, and smart cities.

IoT Market - Number of IoT Connections

For connectivity vendors, the number of IoT connections is an essential indicator that describes this market's potential.

IoT Analytics generated an excellent overview of these connections based on the market's connectivity type.

5G experienced the highest growth rate of the bunch. 5G has become popular due to increased bandwidth, low latency, massive connectivity, improved reliability, network slicing, energy efficiency, and much more.

In a later article, I will describe the benefits of 5G in more detail. This would go beyond the scope of this article.

Other connectivity technologies like NB-IoT, Cat-M1, or LPWAN technologies address the unique requirements of IoT devices, especially in scenarios where devices are scattered over wide areas, need long battery lives, and don't require high data rates.

Narrow Band IoT (NB-IoT) has been specifically developed with the IoT market in mind. It's a popular technology in Europe and Asia for applications like smart metering, smart parking, and agricultural applications. This is a cellular technology that requires a cellular network provider.

Extracting the number of IoT connections by type is tricky, with many different sources depicting slightly different numbers. Therefore, I will include a few charts showing cellular IoT connections.

In 2020, IoT Analytics provided an overview of the market share of different LPWA technologies. Two technologies stand out - NB-IoT and LoRa.

When looking into long-range, low-power IoT connectivity solutions, two of the most prominent technologies are Narrowband IoT (NB-IoT) and LoRa. Both are designed to offer long-range communications for IoT devices while consuming minimal power. However, they cater to different use cases and have distinct benefits and disadvantages. If you know the benefits and disadvantages of NB-IoT vs. LoRa, you can skip the next section and focus on the upcoming chart.

Here's a comparative analysis:

NB-IoT is a standardized and global technology that benefits from standardization by the 3GPP, which ensures global interoperability and compatibility across devices and networks. It operates within the licensed spectrum bands, meaning it has minimal interference. Due to its lower wave spectrum, it can penetrate deeper into buildings or the underground. A key benefit is the existing infrastructure around NB-IoT, which leverages existing LTE infrastructure, making its rollout more straightforward for telecom operators.

The disadvantage of NB-IoT is its ongoing data costs associated with telecom networks. This is a double-sided coin, as the users enjoy the existing infrastructure and maintenance by the provider but also pay for it. This is important when comparing it to LoRA, which we will examine in the next section. NB-IoT is slightly more complex due to its cellular nature, potentially increasing end device cost and power consumption.

The chart below describes the range, coverage, efficiency, and other metrics based on the connectivity technology used. Users must be aware that each technology has unique advantages and disadvantages and maintenance costs associated before choosing the technology for their needs.

LoRa connectivity like LoRaWAN can transmit data over vast distances (up to 15 km in suburban areas) while maintaining low power consumption, enabling devices to run for years on a single battery charge. LoRa operates on unlicensed bands, allowing businesses or individuals to set up their networks without telecom integration. It can be cost-efficient as it operates in an unlicensed spectrum and eliminates recurring telecom fees. The simplicity of LoRa devices can result in lower device and network costs. LoRaWAN is designed to support thousands of devices, making it suitable for large-scale deployments.

The disadvantage of LoRa networks is potential interference from other devices using the same frequency. The data rates are limited as LoRa is designed for low data rate applications, making it unsuitable for high-bandwidth or frequent data transfer scenarios. LoRa networks are managed either by the user or some network-independent group. In contrast to network operators that ensure that the network is up-to-date and well-maintained, LoRa networks rely on private network nodes that could fail over time due to lack of maintenance.

End of the quick analysis.

ENEA provided a simple overview of which connectivity technology suits different applications.

NB-IoT and Cat-M1 are suitable for applications where the user wants to deploy thousands of new nodes that require low data bandwidth and are not stationary. If we consider the non-stationary applications, LoRa technology is a suitable alternative if the user has access or is willing to deploy its own network.

While both NB-IoT and LoRa offer compelling benefits for IoT connectivity, the choice between them often boils down to specific use case requirements, deployment costs, and desired data rates. NB-IoT is an excellent choice for applications requiring consistent and reliable connectivity within existing cellular infrastructure. In contrast, LoRa is a go-to for flexible, cost-effective deployments, especially in areas without extensive cellular coverage.

Industrial IoT - Economic Impact

IoT changed the industrial landscape and moved from a competitive advantage to a competitive necessity to remain competitive. Many studies described the economic value potential of IoT. That's why many companies, not only manufacturing companies, invest heavily in IoT technologies.

IoT Analytics collected information on IoT spending and created a chart showing how much enterprises spend on IoT.

Many other research companies created similar charts to showcase how much companies like manufacturers spend on IoT initiatives.

Or this survey from 2017:

Or, again, a survey by IoT Analytics that describes what CEOs talked most about in Q1 2022. I didn't use the most recent survey, as the topic "Generative AI" skews the visualization by taking the focus point this year.

The Economic Impact

McKinsey did a good job of showing IoT's economic impact on a holistic basis and comparing IoT's economic impacts against other disruptive technologies.

Remote monitoring, maintenance, diagnosis, and many other applications realized with IoT are at the core of IoT's economic on many industries. McKinsey estimates that IoT's total positive economic impact will be as much as $11.1 trillion per year. It's even higher than the mobile internet, knowledge-work automation, cloud computing, and advanced robotics.

McKinsey dives further into the potential of IoT and describes use cases that are created around IoT and how they impact the industry in which they are integrated.

Forbes made a similar study in which it asked several executives about the impact of IoT on their profitability. The survey shows that 75% of leading enterprises credit IoT with increased revenue, with 45% reporting that IoT helped boost profits by 1-5% and 41% saying that IoT impacted profits positively by 5-15% annually.

IoT goes beyond just connecting machines to the cloud and making machine data accessible remotely.

Connectivity is the enabler for fully digitized business processes that integrate neatly between different business pillars. These digital processes enable businesses to initiate factory automation, communicate seamlessly between production and customer, prevent machine downtimes, and much more.

The initial use case for IoT is to access the data and create simple alerts with thresholds.

This is just the tip of the iceberg. Monitoring and alerts are nothing new. Making the available 24/7 has positively impacted operations, but the value chain only begins from here.

McKinsey provides an interesting overview of the real value that IoT enables in businesses.

Connectivity and IoT hardware are the foundation of the digital business, but once hardware and connectivity are in place, these aspects tend to maintain a steady, low-digit growth rate. The economic potential of these simple improvements to connect factory floors and make their data available is already high. But once leaders realize the far-reaching benefits of integrating these insights into their processes, they can realize a much greater impact.

The data-driven company.

Few companies transformed into data-driven companies like Amazon, Lego, or Ocado and realized the competitive and economic advantages. Many other companies are still in the early innings of this transformation.

The potential for manufacturing companies is immense once they go beyond the proof of concept phase and integrate analytics and data-driven decisions into their work processes.

Change begins at the Top

Engineers and their departments are well aware of the benefits IoT provides to them. Monitoring the factory floor from the comfort of their home or office is much more efficient than creating additional communication ladders between the engineers and the floor employees.

But engineers and departments are occupied with keeping operations up and running, so executives must initiate digitalization initiatives from the top down. They need to create the incentives and motivation to use new digital processes and tools to improve the efficiency of their factory and business.

A recent survey by Ovum shows that most IoT initiatives begin on the executive level, traversing downward to create a lasting impact on the business.

Conclusion

The Internet of Things has impacted many industries and areas of our daily lives. I expect this change to continue and favorably impact our lives in the foreseeable future.

By now, the efficiency gains that IoT enables should be clear. Businesses that do not integrate this digital tool into their repository leave economic potential on the table and will potentially lose their competitiveness in this ever-changing and evolving area.

The data-driven business is not a phantasy construct of the 70s anymore. It's reality, and leaders across the board need to adopt digitalization and data and drive their culture with it.

I hope this article helps you find the most interesting charts and resources you need to convince your peers to decide to take the road toward digitalization.

If you have feedback or have other charts and figures that I should add to this article, feel free to reach out to me! I'm open to add more charts to this article to make it the one-stop for IoT-related research!