The Internet of Things (IoT) promises to reshape the world by introducing an estimated 50 billion connected devices to the Internet over the next ten years. While freestanding Internet devices have been around for years, Google’s 2014 purchase of Nest for $3.2 billion was a short heard ‘round the tech world. Companies scrambled to convince investors that they, too, had a plan to capitalize on the IoT revolution. But while the financial pressures to own a piece of this rising industry have received considerable coverage, less attention has been paid to the impact IoT will have on traditional electronics purchasing.
Here are a couple trends purchasers should watch in the short term as the impact of IoT reverberates throughout the industry.
The Internet of Things often boils down to sensors. Real-world data is gathered by a wide variety of sensors, aggregated in a meaningful way, then transmitted over wireless networks to benefit users. The Nest thermostat uses a temperature sensor to determine when home temperatures have reached a pre-specified level, as well as proximity sensors to activate the LCD display when people pass before it. Other tech giants are not standing still. Apple is currently seeking a large number of sensor engineers on LinkedIn, and Google acquired MEMS sensor startup Lumedyne Technologies in November. This burgeoning demand for Internet-connected devices is expected to push sensors prices down at a CAGR of negative five percent for the next five years, according to IC Insights. Purchasers should be prepared see demand for sensors increase significantly in the near future, and may possibly even see longer lead times as competition for these prized IoT components increases.
Realtime order tracking
This heightened demand for sensors will directly benefit purchasers by accelerating the trend of realtime order tracking. More widespread adoption of technologies like RFID and perhaps even disposable GPS will enable users to query the physical whereabouts of their orders whenever the urge seizes them. What may be limited to a handful of services like Amazon Prime today will soon spread to other e-commerce sites as consumers come to expect the ability to track their orders from the moment they click Buy Now. Purchasers will have an unprecedented ability to know exactly where their orders are, and will migrate to distributors who successfully implement these technologies.
The Internet of Things is widely recognized as a legitimate trend that will reshape many aspects of our lives. By studying the specific effects that sensor demand will have on global supply chains, purchasers can stay one step ahead and ensure that they are well positioned to benefit from the IoT.