For semiconductor companies, which are looking for new sources of revenue, the rate of IoT adoption is an important concern. In this article, we will look at the case for optimism, as well as the reasons for more modest expectations. We will also examine new technologies that could accelerate IoT’s growth and product-development strategies that semiconductor companies could implement to increase the appeal of IoT offerings. Organizations are using various emerging technologies such as artificial intelligence (AI) to gain actionable insights from data can expect revenue to grow by 10%.

Reasons for optimism: Increased connectivity helps IoT

If we look at the IoT’s recent growth, the optimists have reason to be encouraged. Consumers are more connected than ever, owning an average of four IoT devices that communicate with the cloud. Globally, an estimated 127 new devices connect to the Internet every second. A report from the McKinsey Global Institute estimates that the IoT could have an annual economic impact of $3.9 trillion to $11.1 trillion by 2025 across many different settings, including factories, cities, retail environments, and the human body .

IoT is also benefiting from infrastructure improvements that have enhanced connectivity. For example, only 20 percent of the global population is now covered by low-power, wide-area networks (LPWANs) that allow long-range communications among connected devices while optimizing both costs and power-consumption requirements. By 2022, however, we expect that 100 percent of the population will have LPWAN coverage. Similarly, technological advances are reducing power requirements, decreasing costs, and promoting the development of more integrated IoT solutions. Consider lidar sensors, the laser-based sensor packages that scan and detect surroundings, which are essential for autonomous driving. Their price has declined more than 10-fold over the past eight years and is expected to drop more than 65-fold over the next two. This decrease, combined with the increased technological sophistication of lidar, is contributing to the development of fully autonomous cars, which could constitute 25 percent of all vehicle purchases by 2035.

Reality check: Industrial IoT adoption has been slower than expected

Many experts view IoT’s slower-than-expected growth within the industrial sector with particular concern. To gain more perspective, we investigated how industrial companies are using IoT applications and tried to estimate whether business-to-business (B2B) growth might accelerate. In addition to basic research, we interviewed and surveyed over 100 leaders from various industries, including public sector and utilities, discrete manufacturing, oil and gas, mining, telecommunications, technology, media, healthcare, and pharmaceuticals.

Few large-scale IoT projects

Our interviews revealed that most businesses are adopting the IoT only to a limited extent. With the exception of oil and gas and mining, leaders from all industries reported that their companies often received real-time data from IoT sensors. However, most leaders reported that their enterprise deployments were still at proof-of-concept stage, and none have yet embarked on large-scale programs.


 

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