InterDigital warned that city authorities could waste billions of dollars if they deploy non-standardised Internet of Things (IoT) products in their smart city projects.
A total of $341 billion (€297 billion) could be squandered by city authorities and their technology partners by 2025 if they fail to make use of standardised IoT applications and services in smart cities.
The U.S.-based wireless technology development company said the figures were the result of a Machina Research study it commissioned. It noted that the results are significant because smart city IoT deployments are a microcosm of the broader IoT market, meaning the problem of fragmentation and financial risk identified are not restricted solely to smart cities.
Jim Nolan, EVP of IoT solutions at InterDigital, said the wide variety of competing IoT technologies and platforms combined with the large number of standards development organisations may hinder IoT deployments. "We can't hope to realise any smart city ambitions until all stakeholders can agree on a common set of IoT standards," he noted.
Machina Research found that the cost of smart city deployments could hit $1.12 trillion by 2025 if non-standardised IoT products are used. In contrast, deploying standardised products would cost $781 billion, some $341 billion less than the non-standardised approach.
The research company believes those savings will be delivered in the form of greater interoperability between IoT equipment, freedom from vendor lock-in, and lower systems integration costs.
Nolan said Machina Research's study "proves the extremely valuable business case for an open standards based approach to IoT."
InterDigital said the benefits for smart city deployments based on standardised IoT equipment go beyond financial savings. The study showed that standardisation could boost the number of connected devices used in smart cities by 27 per cent by 2025, and will also simplify the process of rolling out new services by enabling replication.
Machina Research principal analyst Jeremy Green said the study shows that city authorities can overcome key challenges by utilising standardised IoT products in their smart city deployments.
"Government bodies investing in smart city initiatives to drive civic improvements are under constant scrutiny to ensure public funds are spent wisely. Furthermore, the existing 'Internet of silos' approach to IoT deployment is delaying the widespread adoption of IoT solutions, including smart cities," he said.
Machina Research this week increased its predictions covering the IoT revenue opportunity, stating that sales could hit $4 trillion in 2025 on the back of additional revenue streams including 'exhaust data' from M2M applications, and development of IoT applications and projects.
For more:
- see this InterDigital announcement
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