IoT opportunities and challenges to dominate this year’s show

AT&T IoT

Roughly 8.4 billion connected gadgets will be in use worldwide this year, according to a new forecast from Gartner, up 31 percent from last year, and 12 billion more devices will come online by 2020 as spending on IoT devices approaches $3 trillion.

In fact, a recent report by market research firm ON World predicts the market for industrial wireless sensing, tracking and control equipment and associated services alone will reach $35 billion by the next five years, affecting segments as varied as industrial automation, agriculture and construction.

So it’s no mystery why the emergence of the IoT will play such a big role at next week’s Mobile World Congress. But there are still plenty of concerns about the emerging space.

IoT-related topics absolutely dominate the agenda for the 2017 MWC, from Monday afternoon’s keynote on connected vehicles to a round table discussion on industrial opportunities to – shameless plug here – a luncheon discussion I’ll host featuring top industry executives focusing on low-power, wide-area (LPWAN) networks as providers of proprietary technologies increasingly compete with traditional cellular carriers.

“As the B2C and B2B2C face of the IoT, smart living will be the biggest overall consumer theme at MWC this year. Smart living captures an array of product and service concepts that sit around the technically augmented customer – from metering to health monitoring, cars and fridge, to smart washing machines,” Ovum analysts wrote in a downloadable preview of the show. “Automotive OEMs and their technology partners will have a record industry presence at this year’s event, and there will be plenty of examples of the ongoing evolution of automotive manufacturers into serious technology players.”

The clamor surrounding the IoT risks drowning out some real concerns over the real potential of the market, however. The practical benefits of a smart hair dryer or toothbrush are dubious, but more mundane connected devices – light bulbs, say, or window shades – might be too expensive to gain anything close to mass-market adoption this year. Meanwhile, more sophisticated use cases such as connected cars and robotic surgery may simply be unworkable from a business-case standpoint, as Joe Madden of Mobile Experts recently wrote. And they certainly won’t offset waning revenues from traditional consumer wireless services any time soon.

“The mobile telecom market created a trillion dollars in revenue this year,” Madden wrote in FierceWireless. “Will a new IoT application arise to drive 5G toward a trillion dollars? So far, I don’t see it. 2G brought us affordable voice calls. 3G brought rudimentary data, and 4G put the internet in your pocket…. There’s no trillion-dollar ‘wired’ market for IoT, so don’t expect a huge wave of 5G IoT to happen quickly.”

Madden is right to be skeptical of the IoT in the short term, of course, and maybe even in the mid-term. But these are still very early days: Technological standards are still being developed, networks are being built out, and business models are just beginning to evolve. As progress continues in each of those areas, prices for IoT hardware and services will continue to fall, and – in at least some scenarios – end users will increasingly understand the value proposition.

Perhaps the most lucrative component of the IoT, though, will be the data that all those connected devices generate. That information will be used not just to deliver more targeted ads but also to make factories more efficient, cities more livable and workers more productive across various markets. So one of the keys to the IoT will be protecting that data, analyzing it and putting it to work effectively.

“As both enterprise and consumer IoT technologies and use cases continue to develop, the real promise of deriving value from IoT data will be a key theme at MWC,” Ovum analysts wrote in their MWC preview. “We will hear from service providers, vendors, and end-user organizations on how they will manage the disruptive business models – and consequential privacy and security issues – that surround the use and commercialization of customer data.”

IoT opportunities and challenges to dominate this year’s show