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Internet of Things December 2019/January 2020 Viewpoints

Technology Analyst: Guy Garrud

2019: The Year in Review

The Internet of Things (IoT) is a loosely defined grouping of cyberphysical systems. Because the Internet (or Internets) of Things is still somewhat nascent, a lot of uncertainty exists about the precise shape and business models that will form the IoT years from now. This uncertainty makes the current period both a challenging and exciting time to monitor the IoT space. The past 12 months have seen significant progress in several of the regulatory and technological areas that will help shape the IoT in the next several years at least, which paragraphs below discuss in detail.

Data-Handling Rules

The European Union's General Data Protection Regulation (GDPR) legislation came into effect in 2018, causing significant amounts of discussion about how large companies should approach their data management moving forward. One of the important aspects of GDPR is that it enables much larger fines than did previous data-protection legislation in many of the EU states. Early cases under GDPR have demonstrated that courts are prepared to make use of these larger fines. For example, in July 2019, the UK Information Commissioner's Office leveled two large fines (equivalent to about $125 million and $230 million) for data breaches that exposed personal data, including credit-card details. These fines are far larger than the previous fine limit of £500,000 (about $625,000). The European Union is not the de facto leader in data-protection regulations, and the GDPR fine limit is still considerably less than the fines levied by some organizations. For example, the US Federal Trade Commission reportedly fined Facebook $5 billion in response to the Cambridge Analytica scandal (which is about twice the amount that would have been possible under GDPR).

Network Access

A core consideration for IoT applications is how to connect potentially billions of devices to each other and the wider digital world. The past 12 months has been an exciting time for internet connectivity technologies, with significant developments in several next-generation networking technologies.

Satellite Internet

At the time of writing, SpaceX has launched 122 of its planned 12,000 (potentially as many as 42,000) Starlink satellites. The satellites are in low earth orbits at altitudes of about 340 miles (550 kilometers). SpaceX has filed a request with the United States Federal Communications Commission for operating up to a million satellites, although that request is some way down the road map from even its more ambitious current plans. The company hopes to begin offering satellite-based internet access in the United States by mid-2020.

Starlink's initial focus on North American urban users highlights the gulf between its current capabilities and the company's rather lofty goals of providing affordable internet access to rural areas worldwide. For the time being at least, rural areas will be better served by satellite internet providers using geostationary satellites, but ultimately Starlink or similar platforms could offer an attractive means for connecting IoT systems in areas that are poorly served by current-generation cellular and wired telecoms.

5G

Cellular companies have begun rolling out their initial phases of 5G networks. The progress is thus far limited, with network providers struggling to offer blanket 5G coverage. A number of early 5G cellular deployments rely on low- and midband 5G. Low-band 5G provides wide-area coverage with a modest but not substantial improvement over existing 4G long-term evolution speeds. The most disruptive 5G technology is high-band millimeter-wave (mmWave) 5G, which can have very high data throughput but whose signal has a very short range and minimal object penetration. Most cellular providers are focusing on low and midband 5G deployments for now. Notable exceptions include the United States, where Verizon and AT&T deployed mmWave technology in certain urban areas in 2019.

A lag also exists between the initial rollout of 5G networks and devices that incorporate 5G hardware. Samsung, LG, Huawei, Oppo, and Xiaomi are among the smartphone manufacturers that offer 5G-compatible handsets as of late 2019, but these handsets form only a small fraction of the available handsets, and Apple is a notable exception, not including 5G connectivity in its 2019 iPhone models.

Wi-Fi 6

Wi-Fi 6 (the latest generation of the ubiquitous Wi-Fi standard) saw real-world rollout in 2019. Various consumer devices—including flagship smartphones from Apple and Samsung—support the new standard, as do hardware manufacturers, including Qualcomm. The new standard expands the previous range of frequencies that devices used for communicating, using frequency bands ranging from 1 to 6 gigahertz (GHz) (rather than just the previous 2.4 and 5 GHz bands). The additional frequency availability, in combination with advances in signal multiplexing, means that Wi-Fi 6 equipment will be better able to handle larger numbers of devices without suffering significant reductions in bandwidth or risking signal interference between devices. This improvement is modest for Wi-Fi providers in crowded public environments but could also prove to be a game changer for many potential enterprise IoT systems.

Bluetooth

In January 2019, the Bluetooth Special Interest Group (the body that regulates the standard) launched the newest generation of the Bluetooth standard: Bluetooth 5.1. In addition to enabling some incremental improvements, the new standard enables Bluetooth devices with multiple antennas to track their location relative to that of other devices with up to centimeter-level accuracy. This improvement enables devices to operate more efficiently by using phased-array antennas to focus Bluetooth signals in the direction of the receiver. It also opens up the possibility of using Bluetooth, either alone or in combination with other technologies, as a means of tracking device locations. This capability could find use in a variety of IoT applications—in particular, to aid in tracking pieces of equipment in large warehouse or industrial settings.

Consumer IoT Update

Recent months have been brutal for smaller players in the smart home market. A variety of companies have either disappeared or been subsumed into larger players, often causing significant disruption to their existing user base in the process.

Nest, the Alphabet-owned company producing a range of smart home products including thermostats and smoke detectors, was absorbed back into its larger parent company. In the process, Nest's user ecosystem died, pushing owners of Nest devices into using Alphabet's Google Home–brand smart home platform. Other companies—including Wink, Leeo, and Anki—have fared poorly, fueling rumors of potential acquisitions, shutdowns, and loss of product support.

Despite these difficult times for some smart home companies, the past 12 months have seen other companies make significant progress. Swedish furniture retailer IKEA continued to find a ready market for its smart home products and has further expanded its range of smart lightbulbs with a new line of decorative bulbs and unconfirmed rumors of wireless control "buttons" for triggering preprogrammed lighting setups. Key to IKEA's strategy has been to make smart home products affordable. For example, the new decorative bulbs retail at $9.99, whereas a comparable product from Philips sells for more than twice that amount.

On the darker side, media outlets raised some privacy concerns about Amazon subsidiary Ring, which has entered into hundreds of agreements with law-enforcement agencies in the United States, enabling police to request images from users' home-security cameras.

Meanwhile, the major players in the smart home market have continued to make progress. A few years ago, Amazon sought to maximize its first-mover advantage with its Echo smart speakers and Alexa voice assistant. Google, although later to market and still in second place behind Amazon in terms of units sold, has made considerable headway in the past two years. Amazon has responded by seeking more innovative ways to integrate Alexa into users' daily lives. An Amazon hardware event in 2019 saw the company launch a range of wearables, including smart earbuds and even a smart ring, which also act as interfaces for the company's voice assistant.

A notable outlier in the smart speaker/smart display market is Facebook. Despite bringing a relatively sophisticated set of devices to the market in 2018, the company has failed to gain a significant market share for its Portal smart display devices (less than 1% of the smart speaker market by some estimates), and industry rumors suggest that sales of the devices have been a disappointment.

Look for These Developments in 2020

  • California is a major hub for many IoT businesses and platforms. The implementation of California's data privacy and cybersecurity laws could have a significant impact on the entire IoT value chain, from device developers through to cloud-service providers.
  • Monitor the rollout of 5G networks. In particular, bottlenecks and sluggish deployment outside urban centers could hamper companies wishing to use 5G as part of an IoT system.
  • Further tensions between the United States and China could have a strong impact on the electronics industry. In the short term, such tensions could lead to price increases as hardware manufacturers struggle to source components. Medium- and longer-term impacts are harder to predict but could push China toward developing domestic equivalents of several key technologies—in particular, in the realm of integrated-circuit manufacturing.