The Internet of things (IoT) is one of the most rapidly growing spaces you may have never heard about. The Internet of Things has kept a relatively low profile during the last few years, however that may be changing. AT&T just announced they now have 22 million connected devices and we are just in the very early part of the first inning. IoT growth is accelerating and the numbers are getting quite impressive. It is one of the newest and fastest growing opportunities we have seen.
What is the Internet of Things? It’s what connects machines to each other and to companies behind the scenes to provide a much better and different user experience. We know about the Internet. It’s how we communicate, surf the web and use social networks. The Internet of Things works behind the scenes. In soime cases, we may not even know we are using it. It’s what links every machine and every company with every other machine and company, and also with the user.
Think of the IoT as the behind the scenes crew filming a hit movie. They are necessary, but you may not see a sign of them on film. IoT lets companies use the Internet to reach machines and let them communicate with each other, with headquarters, with other devices and with users instantly, from local to worldwide.
IoT is everywhere, yet we don’t even realize we are using it. It’s how things will work going forward. Corporate leaders are jumping in now, and they are changing the way things work. That gives them a competitive advantage early on. Eventually, all companies will use the IoT or they will not be able to keep up. At that point, the competitive advantage changes to the simple cost of doing business. We will see a shakeout of companies who embrace the IoT and those who don’t. I see many companies struggling and even failing if they are not on board, as the IoT grows and changes the user experience.
Things Are Changing
AT&T is one of the leaders in the IoT space. They announced signing Internet of Things agreements with more than 136 companies in different industries. These early adopters are the leaders in their industries. Add this to the 22 million IoT connected devices and you can see the opportunity. Industries these IoT devices are in include automotive, healthcare, security, energy, aviation, agriculture, transportation, supply chain logistics and more.
Ever wonder how your new car connects to the Internet while you are on the road providing enhanced information like traffic, weather, news and Internet access showing nearby restaurants and even making a reservation? That’s just one example. IoT lets creative minds in every industry work with equipment makers and network providers to come up with new ideas and innovation. A few examples of IoT devices connected to the AT&T network are connected cars, connected health care devices, home security and automation, fitness devices, smart home, smart city, assorted business and consumer products and services and much more.
The IoT marketplace is one of the most exciting and fastest growing spaces for companies to innovate and investors to invest. There will be plenty of hits and plenty of misses. Fortunes will be won and lost depending on the segment and the company, but the entire space of equipment makers and network providers generally speaking will be rapidly growing. And every IoT device needs to connect so I think wire line and wireless networks like AT&T Inc. ($T), Verizon Communications Inc. ($VZ), CenturyLink Inc. ($CTL), Sprint Corp ($S), T-Mobile US ($TMUS) and more have an enormous growth opportunity ahead.
I believe the IoT space will continue its rapid growth and double or triple in size during the next few years. The IoT space is already worth trillions of dollars today. This IoT marketplace is very similar to the excitement we saw around the Internet late 1990’s. Except this time we have the knowledge and experience of the ups and downs this marketplace can produce. I don’t think that will slow down investment, but the invested dollar will be more careful this time around.
A recent AT&T press release illustrates their rapid growth in this new IoT area.
- Digital Life is already in 82 markets.
- They expect to connect nearly 50% of all newly connected US passenger vehicles by the end of this year, 2015.
- They connect more than 40% of the connected farm machines in the United States.
- They connect more than 1.9 million fleet vehicles.
- They connect 283,500 refrigerated shipping containers.
- They have certified more than 2,200 different types of connected devices so far.
- They offer a Global SIM that provides wireless connections around the world, in more than 200 countries and territories.
This growth is quite impressive. Especially when the vast majority of us know nothing about this IoT opportunity. That may be changing as this industry segment continues to grow. I believe it will start to be in news stories on a daily basis going forward.
IoT is a brand new space, but it is so rapidly growing and so transformative, it will change everything we know today very quickly. Keep watching the news and growth in this sector.
Equities.com columnist Jeff Kagan is a Wireless Analyst, Telecom Analyst, Industry Analyst and consultant. He shares thoughts on the changing industry, which he's been following for 25 years. He follows what's hot, what's not, why and what's coming next. Email him at jeff@jeffKAGAN.com
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