Internet Of Everything 2016

Providing in-depth insight, data, and analysis of everything digital.BI Intelligence

The Internet of Everything

THE INTERNET FIRST CAME TO US ON PCS

Estimated Global PC Installed Base

Source: BI Intelligence Estimates, 2015

-

15

30

2015E 2016E 2017E 2018E 2019E 2020E

InstalledDe

vices(Billio

ns)

IT THEN MOVED TO SMARTPHONES

Estimated Global PC And Smartphone Installed Base


-

15

30

2015E 2016E 2017E 2018E 2019E 2020E

InstalledDe

vices(Billio

ns)

Smartphones PersonalComputers

EXPANDED TO TABLETS, SMARTWATCHES, AND TVS

Estimated Global PC, Smartphone, Tablet, Connected TV, And Smartwatch Installed Base


-

15

30

2015E 2016E 2017E 2018E 2019E 2020E

InstalledDe

vices(Billio

ns)

Smartphones

PersonalComputers

Tablets

Smartwatches

ConnectedTVs

AND IS NOW COMING TO ALL OF OUR EVERYDAY DEVICES UNDER THE INTERNET OF THINGS

Estimated Global PC, Smartphone, Tablet, Connected TV, Smartwatch, And IoT Device Installed Base


-

15

30

2015E 2016E 2017E 2018E 2019E 2020E

InstalledDe

vices(Billio

ns)Tablets

PersonalComputers

Smartwatches

ConnectedTVs

IoTDevices

Smartphones

BY 2020, 34 BILLION DEVICES WILL BE CONNECTED TO THE INTERNET

Estimated Global Internet-Connected Device Installed Base


-

20

40

2015E 2016E 2017E 2018E 2019E 2020E

InstalledDe

vices(Billio

ns)

THAT’S MORE THAN 4 DEVICES FOR EVERY HUMAN ON EARTH

2020 Estimated World Population Vs. Internet-Connected Devices

Source: UN, BI Intelligence Estimates

8

34

GlobalPopulation Internet-ConnectedDevices

Billio

ns

THE INTERNET OF THINGS HAS THE POWER TO REVOLUTIONIZE EVERYTHING

Source: Shutterstock- Mikko Lemola

IT’S REVOLUTIONIZED OUR HOMES…

Source: Shutterstock

OUR BUSINESSES…

Source: Getty

AND OUR CITIES…


WHAT’S DRIVING THE IOT’S GROWTH?

BY 2018, HALF OF THE WORLD WILL BE CONNECTED TO THE INTERNET

Estimated Penetration Of Global Population Using The Internet

Source: ITU

0%

50%

100%

2005 2007 2009 2011 2013 2015E 2017E 2019E

AND THE PRICE OF HARDWARE THAT MAKES THE IOT POSSIBLE IS DROPPING

Average Sensor Cost Forecast

Source: Goldman Sachs, BI Intelligence Estimates, 2014

$0.00

$0.75

$1.50

2004 2006 2008 2010 2012 2014 2016E 2018E 2020E

BY 2020, 24 BILLION IOT DEVICES WILL BE INSTALLED

EstimatedGlobalInternet-ConnectedDeviceInstalledBase


-

15

30

2015E 2016E 2017E 2018E 2019E 2020E

InstalledDe

vices(Billio

ns)

THE MAJORITY OF IOT DEVICES WILL BE USED BY BUSINESSES AND GOVERNMENTS

Estimated Global IoT Device Installed Base


0

15

30

2015E 2016E 2017E 2018E 2019E 2020E

InstalledDe

vices(Billio

ns)EnterpriseIoTDevices

GovernmentIoTDevices

AND BUSINESSES WILL BE THE TOP INVESTOR IN IOT SOLUTIONS

Estimated Global IoT Investments Compounded 2015-2020


$-

$5

$9

Enterprise Government Consumer

USD(Trillions)

HOW ARE BUSINESSES USING IOT DEVICES?

AS OIL PRICES FALL…

Historic Oil Prices

Source: Federal Reserve, Bank Of St. Louis, 2015

$-

$20

$40

$60

$80

$100

$120

OIL AND GAS EXECUTIVES ARE INVESTING IN THE IOT TO BECOME MORE EFFICIENT

Global Oil & Gas Company Executives’ Future Plans To Invest In Digital Technologies Over The Next 3-5 Years

Source: Accenture, Microsoft, 2015

18%

0% 25% 50%

Don'tPlanToInvest

InvestTheSameAmount

More

SignificantlyMore

MANUFACTURERS ARE CURRENTLY SEEING THE MOST RETURNS FROM IOT INVESTMENTS…

Source: TATA Consultancy Services, 2015

0% 25% 50%

MediaandEntertainmentConsumerPackagedGoods

InsuranceAutomotive

UtilitiesHealthcareandLifeSciences

HighTechTravel,Transportation,andHospitality

RetailEnergy

TelecomBankingandFinancialServices

IndustrialManufacturing

Industries Seeing Largest Returns From IoT Investments% of respondents in their industry with 2014 revenue gains from IoT of > 30%

AUTOMATING THEIR PRODUCTION THROUGH INTERNET-CONNECTED ROBOTS

Estimated Global Industrial Robot Shipments

Source: IFR Estimates, BI Intelligence, 2014

-

250

500

2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

Installatio

ns(Tho

usan

ds)

AGRICULTURAL COMPANIES ARE USING SENSORS TO COLLECT DATA FOR PRECISION FARMINGEstimated Amount Of Data Generated By The Average Connected Farm Per Data

Source: Onfarm, BI Intelligence Estimates

-

2,500,000

5,000,000

DataPointsGeneratedPerDay

DOCTORS CAN REMOTELY MONITOR THEIR PATIENTS

PercentOfAmericansWithAWearableFitnessTrackerByAge

Source: Icontrol State of The Smart Home, 2015

0%

10%

20%

Total 25-34 35-44 45-54 55-64 65+

INSURANCE COMPANIES ARE TRACKING CUSTOMERS’ DRIVING HABITS FOR USAGE-BASED INSURANCE…

Estimated Number Of US Drivers Who Have Or Have Had Usage-Based Insurance

Source: Insurance Research Council, Tower Watson, NHTSA, BI Intelligence Estimates, 2015

-

30

60

2014E 2015E 2016E 2017E 2018E 2019E 2020E

Numbe

rOfC

onsumers

(Million

s)

AND ADOPTING IOT DEVICES RAPIDLY

Q: How far, if at all, has your company progressed with these IoT-related connected insurance initiatives?

Source: Accenture, 2014-2015

0%

50%

100%

2014 2015 2014 2015 2014 2015

ConnectedHome/Buildings

HealthandFitnessMonitors

OtherWearables

It'snotcurrentlyofanyinterest

It'satopicoffocus/discussionsbutwehavenoconcreteplansyet

Strategydefinedinthisarea

Wehavelaunchedpilotsorareintestphase

Wehavealreadylaunched,orareabouttolaunchproductsandservicesusingthesetechnologies

RETAIL STORES ARE USING BEACONS TO TRACK THEIR IN-STORE CUSTOMERS AND PUSH DISCOUNT OFFERS

$-

$25

$50

2015E 2016E

USD(Billion

s)

*Top 100 Retail Locations OnlySource: BI Intelligence Estimates, 2014

Estimated US In-Store Retail Sales Influenced By Beacon-Triggered Messages

UTILITIES COMPANIES CAN REMOTELY MONITOR THEIR CUSTOMERS’ POWER USAGE

Source: Pike Research, IBIS World, USITC, European Commission, Northeast Group, Ernst & Young, News Releases 2010-2015, BI Intelligence Estimates 2015

-

500

1,000

2014 2015E 2016E 2017E 2018E 2019E 2020E

InstalledBa

se(Billion

s)

Estimated Global Number Of Smart Meters Installed

THE POSSIBILITIES ARE ENDLESS

HOW ARE GOVERNMENTS USING IOT DEVICES?

AS THE URBAN POPULATION RISES…

Estimated Percentage of World Population Living In Cities

Source: UN Estimates, 2015

0%

35%

70%

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

2008

2011

2014

2017

2020

2023

2026

2029

2032

2035

2038

2041

2044

2047

2050

WeAreHere

URBAN PLANNING FOR CONNECTED CITIES WILL BECOME MORE IMPORTANT


AND CITIES’ INVESTMENT IN THE IOT IS SOARING

Estimated Connected Cities’ Investment In IoT Systems Per Year


$0

$70

$140

2014E 2015E 2016E 2017E 2018E 2019E

USD(Billion

s)

BY 2020, 6 BILLION IOT DEVICES WILL BE USED BY CITIES

Estimated IoT Device Installed Base for Connected Cities


-

4

7

2014E 2015E 2016E 2017E 2018E 2019E

IoTD

evice

InstalledBa

se

(Billion

s)

WHICH CAN IMPROVE CITIES IN MULTIPLE WAYS

Source: Libelium

GOVERNMENTS ARE ALSO AUTOMATING THEIR DEFENSE

Global Spending on Smart Weapons

Source: Transparency Market Research, BI Intelligence, 2015

$-

$40

$80

2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E

USD(Billion

s)

THROUGH DRONES AND ROBOTS

Global Shipments of Military Robots

Source: Frost & Sullivan, BI Intelligence, 2015

0

70

140

2012E 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E

Thou

sand

s

HOW ARE CONSUMERS USING IOT DEVICES?

THE SMART HOME MARKET HAS BEEN STRUGGLING TO TAKE OFF

North American Smart Home Device Penetration

Source: McKinsey, 2015

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Connected Smoke/CODetectorRemoteVideo

Connected LockConnected LeakDetectorConnected Thermostat

Connected LightingConnected EnergyTrackingConnected LawnSprinklers

VitalsDataUploadingConnected Scale

Elderly/ChildActivityUploadingConnected PillCase

ConnectedWasher/Dryer/DishwasherConnected Stove/Oven

Connected Refrigerator/PantryConnected Cleaning/Vacuum

Multi-RoomMusicSeamlessAudio/VideoPlaybackRoom ControllingHomeTheater

SecurityAn

dSafety

Utilitie

sManagem

ent

Wellness

Monito

ring

Smart

Appliances

Smart

Entertain

ment

BECAUSE THE DEVICES ARE TOO EXPENSIVE

2015AdvertisedPricesOfConnectedVs.Nonconnected HomeProducts

Source: Amazon, Sears, Nest, Walmart, Best Buy, Build.com, Sears, Home Depot

$250

$16

$250

$18

$200

$31 $25 $8

AugustDoorLock

MasterLock

NestTherm

ostat

Honeyw

ellB

asic

Thermostat

NestConnectedHom

eMonito

ringCamera

AstakW

iredSecurity

Camera

BelkinW

emo60WLight

Bulb

CreeLED

i60W

Connected Nonconnected

HOWEVER, THE CONNECTED CAR MARKET EXPLODED IN 2015


PRIMARILY BECAUSE AUTOMAKERS SEE MULTIPLE INTERNAL BENEFITS FROM CONNECTING THE CARS THEY SELL

1• CollectingDataGeneratedByTheCar

2• PushingOver-The-AirUpdatesToPreventRecalls

3 • ImprovingCarSafety

4• SellConnectedCarProducts&Services(e.g.apps,media,etc.)

How Automakers Benefit From Connecting Cars

AT&T CONNECTED NEARLY 3 MILLION CARS IN THE FIRST 9 MONTHS OF 2015

AT&TConnectedCarNetAdds

Source: AT&T Company Filings

-

600,000

1,200,000

3Q2014 Q42014 Q12015 Q22015 Q32015

NetA

dds

THAT’S 43% OF THE CARS THEIR 8 AUTOMAKER PARTNERS SOLD

AT&T Net Adds Vs. Total Car Sales Of 8 Partners

Source: AT&T Company Filings, Motor Intelligence, WSJ, Company Filings, 2015

-

1

2

3

4

5

6

7

AT&TPartners AT&T

Million

s

SubaruofAmerica

Volvo

NissanNorthAmerica

Tesla

BMWofNorthAmerica

AudiofAmerica

Ford

GM

THESE TECHNOLOGICAL ADVANCEMENTS WILL LEAD TO A SELF-DRIVING CAR

Global Self-Driving Car Shipment Forecast


-

3

6

2015E 2016E 2017E 2018E 2019E 2020E

CarsShipp

ed(Tho

usan

ds)

RemoteValetAssistant

HighwayAutopilotWithLane-Changing

UserOperated

YearFe

ature

IsRe

leased

WHAT’S SLOWING THE IOT DOWN?

THE CURRENT INFRASTRUCTURE CAN’T HANDLE THE INTERNET TRAFFIC

NorthAmericaMobileDataTrafficForecastInPetabytesPerMonth

Note:Datatrafficprediction basedonaverageofCiscoandEricssonMobile DataTrafficforecastsSource:CTIA

0

1,750

3,500

2010 2011 2012 2013 2014E 2015E 2016E 2017E 2018E 2019E

THEREFORE, NEW NETWORKS ARE BEING INTRODUCED

Source: BI Intelligence THE IoT NETWORKS REPORT, 2015

ISP/ServerBase

Hardwire

TelcoWirelessNetwork

InternetModem

Gateway

Wireless Router

InternetNetworkDevices

Ethernet

Ethernet

Wi-Fi

Wi-Fi

InternetOriginationPoints

IoTDevices

MeshNetworking

NetworkSignalRangeLow

High

LongRange

Hardwire

ALL OF THESE NEW NETWORKS ARE CONFUSING TO BUSINESSES, GOVERNMENTS, AND CONSUMERS


THERE ARE ALSO 3 PRIVACY AND SECURITY CONCERNS

IOT DEVICES OFTEN LACK BASIC CYBERSECURITY PROTECTIONS

(I.E., STRONG PASSWORDS, ENCRYPTION)1.

IOT DEVICES GIVE CYBER CRIMINALS NEW AVENUES TO STEAL SENSITIVE DATA FROM

ENTERPRISES, CONSUMERS, AND GOVERNMENTS2.

STATE-BACKED HACKERS AND HACKTIVISTS CAN USE IOT DEVICES

TO DO PHYSICAL DAMAGE3.

THESE VULNERABILITIES HAVE BEEN BROUGHT TO LIGHT BY RECENT HACKS

Source: WSJ, 2014; WIRED, Engadget, 2015

AS A RESULT, IN 2016, WE EXPECT CYBER SECURITY INVESTMENTS TO RISE

EstimatedGlobalCybersecurityMarket


$0

$80

$160

2015E 2016E 2017E 2018E 2019E 2020E

USD(Billion

s)

ConnectedCarWearablesConnectedTVMobile/NetworkPCsIoTDevices

AND DEMAND FOR CYBER INSURANCE IS SET TO EXPLODE

EstimatedGlobalAnnualCyberInsurancePremiumsWritten

Source: PwC, Lloyds, BI Intelligence Estimates, 2015

$0

$4

$8

2014E 2015E 2016E 2017E 2018E 2019E 2020E

USD(Billion

s)

EVEN WITH THESE BARRIERS THE INTERNET OF THINGS MARKET

WILL BE HUGE…

IN TOTAL, $6 TRILLION WILL BE INVESTED ON IOT SOLUTIONS BETWEEN 2015-2020

Estimated Global IoT Investment Per Year


$-

$4

$7

2015E 2016E 2017E 2018E 2019E 2020E

USD(Billion

s)

Enterprise Government Consumer

THAT’S 1.25% OF THE GLOBAL GDP DURING THAT SAME TIME

Compounded Global IoT Investment vs. Compounded Global GDP (2015-2020)

Source: : World Bank World Development Indicators, International Financial Statistics of the IMF, IHS Global Insight, Oxford Economic Forecasting, BI Intelligence Estimates

$-

$100

$200

$300

$400

$500

$600

Compounded IoTInvestment Compounded GDP

USD(Trillions)

THAT $6T INVESTMENT WILL GENERATE A $12.6T ROI OVER THE NEXT DECADE

Estimated Global IoT Return On Investment


$0

$8

$15

Compound Investment2015-2020 ROI2015-2025

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Internet Of Everything 2016

Technology

Transcript of Internet Of Everything 2016