Industrial automation has existed for a long time now. It is based on proprietary sensors, embedded devices, controllers, hardware, software and communication protocols. The standardization of all these elements (to enable scale) and adapting them to interwork for different solutions across different verticals such as Health, Home Automation, Retail, Security, Logistics, Education, Industrial Control, Agriculture, etc., catering to the needs of both Enterprises and Individual Consumers leads to the genesis of Internet of Things (IoT).
IoT ecosystem currently is in early stages of evolution. Currently, in the IoT evolution timeline, we are at a stage where we were during the early ‘90s of the “Internet Era”. The Google(s) and Facebook(s) of the IoT are yet to be born and/or yet to come into limelight.
Having said that, there are two key trends from the Mobile Era playing an early, yet vital role in shaping the evolution of the IoT ecosystem:
1. Smartphone Will Become the Hub for IoT Solutions
As IoT goes mainstream, all the sensor-enabled connected devices need to be communicated with and controlled, and Smartphone is the best device for human interface and interaction with these connected devices. Currently, there are over 2.1 billion smartphones in the world, and the consumers have grown accustomed and are comfortable using this device. It is only logical to transform a device that the target user is comfortable with, instead of introducing a new controlling device that could potentially infuse lag in adoption in terms of education and familiarity.
Also, smartphones today support various radios such as Cellular, Wi-Fi, Bluetooth, etc., which can be used for communication as a part of IoT solutions. Going forward, chipset makers are expected to integrate multiple band radio antennas so that smartphones can act as both communication and media streaming devices along with being IoT network controlling hubs. And, with multiple in-built sensors such as accelerometer, gyro meter, pressure sensors, biometric sensors, camera, etc., smartphones can be used as complementary devices for various IoT solutions (especially, in the Wearables space).
Currently, all Wearable solutions (the early set of consumer IoT solutions), be it fitness trackers, smart watches, health diagnostics devices, security-based devices, etc., work in tandem with smartphones.
Also, large companies making early moves into the IoT ecosystem development such as Apple (with their device-centric approach) and Google (with their cloud/services-centric approach) are putting the smartphone at the center of their IoT ecosystem development.
2. Mobile App Developers Will Be the Early Innovators in the IoT Space
As smartphone becomes an integral part of the IoT solutions, mobile application developers have an edge to evolve as early innovators in this space. Mobile app developers can leverage their competencies of consumer-centric design and user interface development and integrate them with communication protocols and sensor based functionalities to develop successful IoT solutions that can convert smartphones into IoT solution hubs.
In mid-2014, mobile app development space has been remodeled significantly. With the launch of iOS 8 in June 2014, Apple has integrated the core offerings of the most successful and popular mobile apps such as Snapchat, WhatApp, Dropbox, etc., as features of its native Operating System (OS), sending a clear message to its app developer partners that apps that are based purely on design and native OS feature gaps will have limited shelf-life. On the same day, Apple has also launched a number of IoT platform modules such as HealthKit, HomeKit, CloudKit, etc., and ushered the developers to start developing a new set of applications, based on Utility and Functionality. In the same month, Android launched “Android Wear”, its OS for Wearable devices. So, the direction to the app developers from the two winners of the mobile era was clear.
Currently, of over 9 million mobile app developer universe, over 3.2 million developers are working on IoT specific applications and services. Of these, over 415,000 are dedicated IoT-only developers. Their number is expected to grow to 4.5 million by 2020. Of the current 415K developers, startups and SMEs account for over 70% of IoT developers.
What Will This Mean For India?
Currently, India is the fastest growing smartphone market in the world. The current smartphone installed base of 165 million is expected to cross 500 million in the next few years. Of over 243 million internet users in India, over 190 million are mobile internet users. India is fast evolving as a “Mobile-First” country.
India currently ranks number 4 among various global markets on the gross mobile app downloads. Currently, a smartphone user in India has on average 17 apps in use on his device, growing from 6 in early 2013.
India currently has over 2 million mobile app developers, and according to Google’s Admob team, this number is expected to grow to 3 million by 2017, at which point India will be the largest base of app developers in the world. Moreover, over 40% of current global IoT solutions developers are based India and China. There is a clear indication that Indian mobile app developers are transitioning to IoT solution development.
As a market, India presents unique challenges in the form of connectivity issues, power failures, logistics issues, price-sensitive consumers, relatively low consumer education of digital products and solutions, etc. IoT solution developers can strategically use Indian market as a test bed, designing and fine-tuning their Product Offerings and Go-To-Market plans for this market and could potentially focus on scaling across global markets.
This extract from Convergence Catalyst’s “Evolution of Internet of Things Ecosystem – Potential In India” Report (India’s first and one of the world’s first market-specific report on IoT) is published on the eve of 5th “World IoT Day”. Convergence Catalyst offers various research, product offering, business growth advisory and investment advisory in the IoT space for various organizations and investor community.