IoT set to be more an enterprise than a consumer play

28th May 2015

By: Natasha Odendaal

Creamer Media Senior Deputy Editor

  

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Despite widespread perception that the Internet of Things (IoT) will be consumer-driven, the emerging phenomenon is going to be more about “things” than people, Deloitte’s latest 'Technology, Media and Telecommunications (TMT) Predictions 2015' report has revealed.

The report, released on Thursday, predicted that the anticipated one-billion wireless IoT devices to be shipped in 2015 – a 60% surge from last year leading to an installed base of 2.8-billion devices globally – would be more about enterprises moving to adopt the associated solutions to ensure cost-savings than a consumer play.

While much of the hype was centred on the capability of consumers remotely controlling electronics and appliances from their smartphones, 60% of all wireless IoT devices would be bought, paid for and used by enterprises and industries, the report detailed.

Many of the consumer IoT solutions on offer were mostly redundant, with high costs that made IoT inaccessible and “not worth it” for most, said Deloitte TMT Africa industry leader Mark Casey.

Casey, unpacking the TMT expectations for the next 12 to 18 months, explained that companies would reap most of the value, accounting for more than 90% of the services revenue generated and recording hundreds of millions of dollars of sales of connected devices, sensors or controllers, while the consumer market would only buy IoT items valued in the hundreds of thousands of dollars.

The report showed that IoT specific hardware was likely to be worth $10-billion and the associated services enabled by the devices, such as apps, analytics and services, worth about $70-billion, with yearly revenue growth of 10% to 20% and 40% to 50% respectively expected.

“Turning a washing machine on remotely, [and] being notified when the cycle is finished offers some level of convenience compared to pushing a button on a machine in the basement. But the clothes still need to be sorted, carried to the laundry room, pretreated, placed in the machine and soap added. In other words, the portion of the task that [the] machine-to-machine improves is trivial,” Deloitte pointed out.

In addition, while there was cost saving from using an appliance during offpeak hours, it was minimal, and the cost could, in some cases, actually be exorbitant.

The report cited the installation and implementation of a full home-based connected system, which would cost hundreds, or even thousands, of dollars, when cheaper alternatives, such as using a simple radio remote control to open a garage door or conventional programmable thermostat for climate control, would achieve the same goal at a “fraction of the cost”.

However, enterprises could benefit.

Power utilities could stand to save billions of dollars a year through the use of automated meter-readings, short-circuit detection and improved real-time diagnosis and location of power outages, as well as through the analytics about consumer demand for power around peak power periods.

“While [the] direct benefit to most consumers from remote control of their washing machines is likely to be marginal, the value to the machine manufacturers is enormous, not just for the information about reliability and advance warning of when a failure is about to occur, but for real-time information on which features are actually being used and how,” Deloitte said in the report.

Further, while the extent of the potential uptake of the embedded features in telematics-enhanced vehicles, the sales of which were expected to surpass 16-million this year, was unclear, insurance companies would leverage the generated driving data to offer discounted insurance rates to drivers who opt-in.

Edited by Creamer Media Reporter

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