A Big Moment for IoT: 12 Billion Existing Connections Surpass non-IoT Connections for the First Time

The Internet of Things (IoT) has seen an astronomical increase in use throughout 2020, more so as the Covid-19 pandemic accelerates the need for inter-connectivity to avoid isolation from workplaces, family, and friends. IoT connections such as connected cars and smart home devices now make up the most active connected devices worldwide. The State of the IoT Q4 2020 & 2021 outlook affirms that of the 21.7 billion worldwide, 11.7 billion (54%) will be IoT device connections at the end of 2020.

This is a first!

By 2025, this number is expected to rise to more than 30 billion IoT connections, equating to almost 4 IoT devices per person on average.

"The path to a connected society is irreversible, despite how problematic it may seem now," said IoT industry expert, Managing Partner of Rocket Wagon Venture Studios, Don DeLoach. "Education is a critical element. How we get there can be extremely beneficial or potentially hazardous and detrimental depending on how we view these systems, assemble these systems, secure these systems, deploy these systems, and regulate these systems. Data is the key asset, and we are headed for a massive explosion of data over time. How data is treated is a material consideration. Ultimately, we will hopefully see more and more decentralized authority and distributed systems that lead to greater levels of agility, security, and resilience."

Several driving factors have influenced IoT's growth; one cause is the surging global cellular IoT connections market in China, where telecom companies account for up to 75% in 2020 with China Telecom (News - Alert), China Unicom, and China Mobile leading the global cellular IoT connections market.

Additionally, smart home devices, including Google (News - Alert) Nest, have led to the rapid adoption of connected home devices throughout households globally. Moreover, Low-power wide-area networks (LPWAN) provide wireless telecommunication designed to allow long-range communications enabling IoT connections for remote devices such as sensors operated on a battery. In 2020 this market reached 423 million IoT connections and is expected to reach 2.5 billion IoT connections by 2025. 

"We are now seeing mass deployments with the cost of components going down, which further drives the 'silicon economics' associated with larger production numbers," said Avner Ziv, CEO, Cloud of Things, an IoT edge and cloud firmware and software provider. "We are well beyond the 'proof-of-concept' stage in the evolution of IoT and industrial IoT as we head into arguably the third decade of connected systems. We're seeing growth in mid-tech applications - adding connectivity to electronic products that are not all that sophisticated but require enhancements like Connected Field Service capabilities for monitoring, maintenance, and management - something we have been working on with Microsoft (News - Alert) and the Azure IoT marketplace intensely this year. The simpler we make connectivity - the more secure - and the more affordable - the less risky large-scale projects are to undertake for the end-customer."

Ziv also said the maturation of partner ecosystems is driving volume. "There is no success in this field without quality partners," Ziv said, "and now that we have crossed this historical threshold of more IoT connections than any other kind, we can expect to see those ecosystems, including open source communities and creative joint ventures to likewise grow."

The increasing adoption of Cellular IoT

According to the report "Cellular IoT Market to 2027 - Global Analysis and Forecasts by Technology; End-Use Industry," the global cellular IoT market is expected to grow at a rate of 22.6% CAGR between 2019-2027 and will account for $18.2 billion by 2027.

Other reasons for the growth of cellular IoT in the world include:

• Presence of fast-growing and developing nations

• Leveraging of advanced technologies
• Increased number of connected devices
• New digital transformation initiatives

 Facets that are expected to support industries working in the cellular IoT market include:

• The commercialization of 5G
• The growing interest in the use of IoT within the automotive industry
• The advent of Narrowband Internet of Things (NB-IoT) & Long-Term Evolution of Machines (LTE (News - Alert)-M)

As LTE-M and NB-IoT offer many advantages such as more generous coverage, low device complexity, low-power consumption, high spectral efficiency, and improved system capacity, it is no wonder that these technologies are currently experiencing high volumes of investment.

While China is currently dominating the Cellular IoT space, this is primarily due to the Chinese government's push in which cellular technologies' adoption is seen as a competitive asset to move the balance of innovation technologically from the western world towards China. Other significant operators, including AT&T, Etisalat, Korea Telecom, Orange (News - Alert), and Telefonica, have commenced the use of LTE-M and NB-IoT in numerous countries.

How LPWAN is driving IoT uptake

LPWAN network rollouts are being established globally, and in terms of average revenue per connection (ARPC), it is significantly lower in cost than anything else that has come before. The sheer number of connections and improved business models being enabled by leveraging this technology purveys that it will have a major positive influence on IoT's growth.

The design of LPWAN enables the economical use of modems that expend little power; the downside is that it is only useful for occasional and low-data-rate transmissions. Despite that, 82% of IoT asset tracker original equipment manufacturers (OEMs) have adopted LPWAN as it becomes more widely available and, in turn, encourages the adoption of more IoT devices. As a result, a more diverse ecosystem of IoT OEMs has materialized and become more widely available.

The full potential of IoT is unlocked by equalizing the playing field and reducing the cost involved in embedded connectivity; we have begun to see a significant number of LPWAN enterprise contracts awarded to businesses and the creation and expansion of many application use cases.

The biggest challenges for IoT adoption today

Even though there are currently 12 billion established IoT connections worldwide today, exceeding non-IoT for the first time ever, the industry still faces various obstacles concerning its utilization and implementation; these are:

• Security - The insecurity is mainly due to the rate at which vendors are trying to develop and bring to market connected devices to compete and lack focus on the product's security element. The more smart devices and sensors that are connected to the internet, the larger the attack surface for hackers to exploit.
• Safety - like any other system, IoT systems are susceptible to device or communications failure. Vulnerabilities could result in risky physical events; for example, ill-intentioned software instructing a device to turn on the oven when there is nobody at home.  
• Data protection and privacy - There is a belief that the vast amount of power held by corporations and governments could be using the data to seek a financial advantage or control over citizens. Therefore, IoT would make it harder for us to have complete control over our lives as transparency increases between people and these corporations/governments.
• Connectivity - A concerning issue that companies regularly suffer from is the inability to accumulate large amounts of data that can be efficiently processed. Companies deploying IoT solutions will find this ailment is increased due to the larger number of connected systems and devices required to process greater sets of data.
• Regulatory standards - Due to lack of transparency, the industry requires setting clear guidelines on who can access the data collected from the IoT devices, how the data can be sold to third parties, and be utilized to develop new services and products.
• Absence of clarity on value propositions and interoperability - Experts within the industry suggest that while IoT has astonishing potential, companies cannot derive clear value through its application.

The growth of IoT solutions has become interconnected with the furtherment and advancement of society as a whole. With more established IoT connections than there are people on the planet and continuously projected growth, it is clear that the Internet of Things is and will continue to become increasingly intrinsic to our lives.