…From the phones in our hands to the televisions on our walls and the appliances in our kitchen, new tech comes at us from every angle [but] many fail to fully understand just how advanced those everyday conveniences are now and the extent of which they will be in the future. Four simple words can help clarify where we’re at and the limitless possibilities of where we’re going – The Internet of Things…While the name may be similar, the Internet of Things goes far beyond simple web surfing and Facebook postings…[It’s] a lot of somethings, and it is being stitched into the fabric of our everyday lives so, what is the Internet of Things and how is it going to change the future?
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In simple terms, the Internet of Things, or IoT, is a series of devices connected by the internet that use installed sensors and processors to communicate with either each other or us. They collect and share data and information. Those devices then use that info to complete tasks, analyze figures, create efficiencies, or report on any other number of data points.
The IoT Today
…There is no limit to what items can be made to be part of the IoT…This connected family of stuff includes:
- light bulbs,
- security systems,
- doorbells, etc….-things that typically wouldn’t connect online, but can be made to do so via the sensors mentioned above – but it doesn’t stop there…
Other household tech [items] are making their way to the market [such as]
- coffee makers,
- vacuum cleaners,
- alarm clocks
- and voice activated assistants to keep your life on track,
to name a few.
When you hear the phrase ‘smart device’, what we mentioned above is just the beginning. For the most part, the public associate today’s IoT with the smart home…[but] here are a few examples beyond your home:
- It’s time for your car’s next oil change, and instead of you calling, your vehicle automatically sets up the appointment, and it’s seamlessly added to your calendar.
- The ID badge you wear at your place of employment clocks you in merely by you walking in the building, or automatically logs your travel miles and submits them for reimbursement when you go out on sales calls.
Beyond the personal and day to day professional implications, the larger real-world implementation is even more impressive. This is most evident in the positive impact the IoT can have on transportation networks.
- What if sensors were placed in a bridges framework or layered into a concrete thoroughfare? Stresses or faults in the surface or structure could be relayed back to a centralized hub where appropriate repairs could then be scheduled.
The IoT can even help with improving efficiencies or keeping cities safe.
- Sensors can aid in determining water leaks within a city’s pipe system to minimize loss,
- monitor when dumpsters [are full] and rollout trash cans are full to maximize garbage truck fuel economy.
On the safety side,
- testing water drinkability in local sources like lakes or streams can lead to better citywide health,
- real-time monitoring of natural conditions and when they could deteriorate can help speed evacuations
- and better direct resources in times of disasters, such as wildfires or flash floods.
The IoT Tomorrow
It does push the case that anything can be made to be part of the IoT and us as a society can reap a considerable amount of benefit from it. That’s the here and now though. What about five or ten years from today?
When you try to comprehend that by the end of the decade there will be approximately 30 billion devices included in the IoT, and then five years later, in 2025, 75 billion will be connected, well, its mind boggling but, aside from more and more things coming online, what is the next evolution?
- Well, for one, advertising will be a lot more interactive. Voice based services are already a mainstay at home with Amazon’s Alexa or Google’s Assistant. Look for this to become a standard occurrence when dealing with other businesses or services that require authentication or who want to engage you on a more personal level…
- The healthcare industry is starting to see a fundamental shift where the IoT can align the past challenges of providing efficient, effective healthcare at reasonable costs.
- Artificial Intelligence, or AI, will also make a huge impact as more devices connect and interact. A good example is Google’s Voice AI, Duplex. Effectively giving the tone and nuance of a human voice to a machine and allowing it to connect with those you don’t want or have time to speak directly with, it represents a giant leap in human – AI interaction.
Patient, customer, and other points of contact won’t be the only areas of expansion. As the IoT grows, so will the development and programming needs of edge devices, like cameras, microphones, and similar data collection points.
- Edge computing helps keep some data analysis within the device itself or “at the edge” as opposed to the central brain apparatus of the cloud. This avoids being tossed on a heavily trafficked network and improves response time and data processing, while also increasing privacy levels.
Not to be outdone, manufacturing and industrial services will also seek to benefit in the coming years from the expanding IoT. In fact, according to Business Insider, it’s expected that $70 billion will be invested by global manufacturers in IoT solutions by 2020.
- Among their deployment strategies expect to see smarter factories that are remotely managed, with machinery monitored and ran more efficiently. This also includes safety and quality control aspects of the plants daily processes.
- The IoT will also improve production flow, from start to finish, with real-time oversight that starts in refining and ends with the final products trip out the warehouse door.
- From there, sensors in the shipping and delivery process can provide a useful understanding of package handling or information in how the shipping methods may have damaged or impacted an order.
It’s impossible to discuss anything related to connected devices and not talk about security. In the case of the IoT, the most prominent concern is privacy.
- You and your devices become part of a more significant, more aggressive data gathering system. You’re not just surfing the web; you’re allowing the capturing of details on your daily habits…
- Also, if something is connected, it means hacking can occur. While no security system is perfect, making sure to protect yourself is paramount to keeping virtual intruders out.
As you update your network and everything attached to it, your security needs to be current as well – and never invest in a product where the protection is iffy at best and non-existent at worst.
As you can see the Internet of Things is more than just a kitchen light programmed to shut off remotely through a smart plug or a high-end thermostat set to adjust itself as outside conditions dictate. Imagine knowing
- if an employee got injured in the making of a product…you purchased in a local store
- what the growing season was like when they harvested raw the materials for your item, and if the company made process adjustments
- if that same product you bought was diverted in transit to your local store because demand was higher in your location than the original destination and, during that delivery trip, the truck traveled over a bridge that was repaired the day before thanks to a sensor that recorded faulty bolts in a girder.
Then to bring it full circle, imagine the next time you visit that store, you get a virtual personalized message thanking you for your last purchase and inquiring if you’d like to see something similar.
It may be simplistic, but the article above is just a small picture of how encompassing the IoT already is and gives you a glimpse of just how big it can be.
By next year there will be twice as many devices connected to the Internet as there are people in the world, according to some estimates, and by the end of the decade, that number may hit 50 billion. This burgeoning market is referred to as the Internet of Things (IoT). This infographic provides a description of the developing IoT space and identifies major companies who are shaping this new market sector and worth looking at for exposure to this important trend.
Today we have identified 5 IoT stocks that are in the business of selling and/or manufacturing the hardware, software, and comprehensive solutions. The stocks on our list have surged as high as 94% year to date and show no signs of slowing down.
Internet-Of-Things (IoT) is the concept of having everyday things or devices connected to the internet or cloud, feeding the general public with information, diagnostics, and updates. From monitoring healthcare and restaurant facilities to home-based care for people with a chronic health issue, IoT is going to revolutionize everyday life. Today, we take a look at potentially undervalued IoT small caps that are trading below the industry average EV/Sales multiple of 1.4x.