The Internet of Things: Too Far Away?

“The Internet of Things” has been a topic of interest in the technology circles for as many as 15 years. Like “Web 2.0”, “the Semantic Web” and “Cloud computing” it is a term that excites keen interest. But how much is hope, and how much, hype ?

The phrase “The Internet of Things” is generally accepted as being proposed in 1999 by Kevin Ashton, who was seeking to apply RFID to manage Procter & Gamble’s supply chain. The Internet of Things is understood by many people as a glamorous way to describe something that has always existed: sensors connecting “inanimate” machinery to a computer, maybe with a network of such sensors all connected to each other thrown in.  Other consider it to be the inclusion of RFIDs on every “thing” – from books to cars to cows – so that those “things” become capable of being tracked and we can easily capture things that we are interested to know about them. Another view is that “smart” grids and “smart” houses form the sum total of the Internet of Things. Right?

Not really. While it incorporates all of the above, the concept of The Internet of Things (IoT) involves much more than that.

Let’s first start with why it is called The Internet of Things. Why not just “connected devices”? Or M2M (machine-to-machine) communication?

At its most ambitious, it is supposed to emulate the way the Internet (IP) connects hundreds of thousands of smaller networks (our “traditional” IP is the Inter-network, or a network of networks). The idea behind the Internet of Things is this:  not only should ordinary objects that we don’t normally visualize as generators of information be connected to each other, many smaller networks of such objects should be able to “talk” to each other. Potentially, one should be able to connect all the objects on the planet to each other. Whether that is necessary of course is a different matter. However, it does point to the fact that the number of such devices in any network will be extremely high. (Consider for instance an electrical grid with thousands of “smart meters” on the network).

Considering its scale, therefore, The Internet of Things will be possible only because of developments in a number of fields, from nanotechnology to wireless sensors.

Applications

Potential applications include:

  • Energy – “Smart” grids leading to more efficient energy use and billing
  • Transportation – Transportation solutions that could track traffic conditions and ease congestion;  automatic emergency handling services (for example, eCall is an European initiative to deploy devices in all cars that will automatically send an emergency notification, data on the seriousness of impact, and coordinates to the emergency services in case of an accident )
  • Household applications – Smart homes
  • Healthcare – Care of the elderly and patients (For instance, implanted devices that can inform a caregiver automatically in case of a fall, or a drop in vital levels)
  • Environment– Monitoring pollution levels in water bodies
  • Security
  • Industrial applications

Developments

A number of ventures claiming to be associated with the “Internet of Things” have grown in the years since 1999, when the idea was first presented, and the present. Most of them revolve around specific products or services such as Netatmo’s “connected weather station” which allows users to track temperature and air quality inside their homes via sensors which are internet-enabled. Withings, a Paris-based company which raised $30 million in venture capital funding in October 2013, produces items such as wireless-enabled weighing scales and other consumer health devices, while Invoxia’s main offering is an audio device for iPhones/Android. In a very different field, Camgian Microsystems is notable for manufacturing hardware products (chips and sensors) that are usable in security and warfare applications. The Mississippi-based company has partnerships with DARPA, Boeing and Honeywell among others.

Unfortunately, most of these products are disparate in that they do not connect to the wider environment, or to other low-level devices (except phones and tablets). An ideal “Internet of Things” application would be, for instance, a weather station that also took into account your current health data (measured through another monitor and transferred to the weather station) and the current outside weather conditions and advised you to wake up and get more exercise (via a connected alarm clock/phone).

Thus, what is urgently needed is a set of common standards so that multiple different companies can build different products that are able to talk to each other. The plethora of platform providers currently being marketed for different uses makes it unlikely that this will happen any time soon.

The Way Ahead

An October 2013 Forbes article notes that the Internet of Things is definitely not here yet, but holds out hope for it by emphasizing the need for “open APIs and common standards”.  Besides this major challenge, other issues to be tackled include potential energy sources (especially important in view of the large number of devices on the network), sensor costs, as well as data privacy, security and ethical concerns.

The International Telecommunications Union in a 2005 report held out great promise for IoT’s applications, predicting everything from smart beverage machines to electronic wallpaper that changes according to one’s mood.  Sounds like a science fiction novel? As Arthur C. Clarke said:

“Any sufficiently advanced technology is indistinguishable from magic.”

—-

Krittika is a PGP-2 student at  IIM Ahmedabad and a member of the Consult Club. She is interested in technology and learning. She holds a B.E in Information Technology from Netaji Subhas Institute of Technology, Delhi.

Google’s strategy for Android

The mobile industry has grown exponentially since the 1990’s to have about 5 billion connections worldwide and a penetration of more than 100% in several parts of the world. This evaluates to there being more than three times the number of mobile users than PC users with about 500 million connections added every year.
Along with mobile phones, smartphones have captured majority of the cellphone market. High end smartphones have become affordable because of availability of cheaper hardware and technology and fast, affordable internet. The smartphone business has shifted from being device based to being operating system based with Android being the fastest growing operating system. Android has captured nearly 50% of the world market share in 2011 as compared to less than 4% in 2007. But how does Google benefit from all of this? How does it source its revenues from Android?
Google’s derives more than 95% of its revenues from advertising using web based services like Google search, Google mail etc. Google perceives the rising consumer base of smartphone consumers both as an opportunity and as a threat. The high penetration and the huge consumer base across all demographics is a lucrative advertising opportunity for the company. However, the dependence on mobile phones for internet access can lead to less dependence on PCs for consumers where Google is the dominant web based service provider for search. But in smartphones, it is the manufacturer and the operating system that determine the default services. So, Google can end up losing its overall market dominance if the smartphone manufacturers decide to move to different default services.
Google provides Android with zero licensing cost along with an entire plethora of services like Google maps with street view and mail customized for Android running mobile phones. This has ensured presence of a complete and standardized platform across a range of manufacturers. Android gives them the flexibility to develop their own UI and enhance user experience as per the manufacturer’s target segment. A tremendous surge in the smartphone market hence ensued because of lowered barriers to entry and has created a tsunami like impact on Nokia, which is now unable to make use of its scale. Google also provides cloud computing services which links all its mobile services to its online services. This gives it an edge over most of its competitors like RIM and Apple. Android gaining dominance is significant because technology markets tend to get standardized around one dominant platform. The standardization of Android and availability of many substitutes for hardware will lead to reduction in profits from manufacturing. This pushes the business in the mobile industry towards providing mobile based software services i.e. application development.
Apple with an App Store of over 350,000 applications leads in the applications race, followed by Android’s Google Marketplace with over 275,000 applications. However, devices based on other operating systems have barely over 50,000 applications. The business model for both these application markets is different. For Apple, the application store acts as a major source of revenues through paid applications and hence paid applications consist of about 65% of the total number of applications. Google on the other hand encourages free applications over paid ones for the Android platform and has about 60% free applications. Google’s policy is skewed towards free applications for two strategic reasons. The first one being that providing good quality free business and multimedia applications would help in increasing the consumer base and also affect consumer disposition to switch from paid applications, that Apple has created, to free applications. Another reason is that if application developers cannot derive revenues from the sale of applications then the only other way of deriving revenues is through advertisement. And Google owns AdMob – one of the largest mobile advertising companies in the world.
Apple depends on sales of applications in its App Store for its revenues. It mainly targets the segment of people who would otherwise not buy a smartphone and brings them into the world of smartphones.  These are potential consumers for Android who can switch for better services and specialized business applications (which Apple cannot move into without alienating its current consumer base) at a much lower price. Google, hence, perceives a low threat from Apple. Another area where this duopoly is heading into is the tablet PC market. This is another fast growing consumer electronic which Apple was successful in commercializing and popularizing. Now, Android based tablet PCs are entering with a similar strategy as that in the smartphones. Thus Google is trying to make Android a standardized platform for mobile phones as well as tablet PCs by creating a vibrant ecosystem of manufacturers, software providers, carriers, developers and advertisers for the consumers so as to supplement its advertising revenue and secure its dominant position in the market.