Download How big is the Internet of Things?

How big is the
Internet of Things?
Marc Jadoul (
@mjadoul )
ETSI IoT/M2M Workshop
Sophia Antipolis, 17 November 2016
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© Nokia 2016
About this presentation
https://en.wikipedia.org/wiki/Nabaztag
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© Nokia 2016
Moore’s law (1965)
The number of transistors in a dense integrated
circuit doubles approximately every two years
Y = Nx
performance
cost
time
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© Nokia 2016
Micro-processor evolution has followed Moore’s law
Sparc M7
Number of transistors
10G
1G
100M
10M
1M
© Nokia 2016
68020
80286
68000
ARM2
8086
8088
8085
6809
6800
8080
Z80
8008
6502
4004
1802
4100
0
10k
1k
100
4
22 Core Xeon
15 Core Xeon
16 Core SPARC T3
6 Core i7
SPARC 64X
8 Core POWER 7
8 Core Xeon
POWER 6
Core i7
Core 2 Duo
AMD K8
Atom
Pentium 4
AMD K7
AMD K6
Pentium III
POWER 1
Pentium II
Pentium I
AMD K5
PowerPC 601
80486
68040
80386
TTL
CMOS
1965 1970
1980
1990
2000
2010
2016
Moore’s law has enabled IoT (r)evolution
Average sensor cost
$1.40
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
2004
2006
2008
Source: Goldman Sachs & BI Intelligence, 2015
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© Nokia 2016
2010
2012
2014
2016E
2018E
2020E
Metcalfe’s law (1993)
The value of a network is proportional to the
square of the number of its nodes – while the
cost follows a more or less linear function
€
value
cost
#
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© Nokia 2016
Facebook growth has been following Metcalfe’s law
Revenue (million US$)
30,000
2016E
25,000
2015
20,000
2014
15,000
2013
10,000
5,000
2008
2009
2010
2011
2012
0
0
200
400
600
800
1,000
1,200
1,400
Monthly Active Users (millions)
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© Nokia 2016
1,600
1,800
2,000
IoT value will come through Metcalfe’s law
Estimated number of installed IoT devices (billions)
25
20
15
10
5
0
2011
2012
Source: BI Intelligence, 2015
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© Nokia 2016
2013
2014
2015E
2016E
2017E
2018E
2019E
Everett Rogers’ diffusion of innovation (1962)
Market penetration
100%
34%
34%
50%
13.5%
Market
diffusion
© Nokia 2016
25%
2.5%
Innovators
9
16%
0%
Early
adopters
Early
majority
Late
majority
Laggards
Market share
70%
Geoffrey Moore’s chasm theory (1991)
‘pragmatists’
‘conservatives’
‘skeptics’
‘visionaries’
‘techies’
Early market
Mature market
The greatest peril in developing high-tech markets is closing the gap
between the early adopters of any technology and the mass market.
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© Nokia 2016
Many IoT devices and apps are still stuck in the chasm
Worldwide wearable device shipments (million units)
8.1
5.7
3.9
4.4
4.7
4.8
2.8
3.1
3.7
3.7
2.7
3.1
3.6
3.9 4.1
1.5 1.6
Fitbit
Xiaomi
1Q2015
2Q2015
Source: IDC Worldwide Quarterly Wearables Tracker
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© Nokia 2016
3Q2015
Apple
4Q2015
1Q2016
1.0 0.9
0.7 0.7 0.9
Garmin
2Q2016
1.6
Clayton Christensen's innovator's dilemma (1997)
It is in disruptive innovations, where we know least
about the market, that there are such strong firstmover advantages. This is the innovator’s
dilemma.
Disruptive technology should be framed as a
marketing challenge, not a technological one.
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© Nokia 2016
Crossing the chasm
Metcalfe’s curve
Moore’s curve
Technology driven
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© Nokia 2016
Value driven
Jeremy Rifkin’s zero marginal cost society (2014)
The IoT is emerging with the potential of pushing
large segments of economic life to near zero
marginal cost in the years ahead.
Prosumers can connect to the network and use
big data, analytics, and algorithms to accelerate
efficiency, dramatically increase productivity, and
lower the marginal cost of producing and sharing a
wide range of products and services to near zero,
just like they now do with information goods.
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© Nokia 2016
The IoT is enabling a zero marginal cost value model
av
lim
=
mc→0 mc
∞
av is the added value, mc is the marginal cost of an IoT service
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© Nokia 2016
So, how big is the
IoT’s (potential) value?
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16 ©
©Nokia
Nokia2016
2016
Moore’s Law applied to the IoT
(Billions per area)
Component density
100
10
8X increase in performance or
8X drop in price for a given performance
1
2013
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© Nokia 2016
2014
2015
2016
2017
2018
2019
2020
2021
Connected Users/Devices (Billions)
Connections squared (Billions)
Metcalfe’s Law applied to the IoT
100
58.1
the value
20.8
10
3.0
2.7
4.9
3.8
3.2
3.2
3.0
1.9
1
1.2
1.0
2013
1.4
1.2
2014
2015
Internet users
18
7.5X
© Nokia 2016
7.8
7.6
6.4
5.5
3.4
36X
the value of
the Internet in 2016
1.6
2016
of the
Internet
In 2020
2017
IoT connections
2018
2019
Internet value
2020
2021
IoT value
A standards-based, horizontal IoT platform can boost
the value of the network
D11
A1
A2
•••
AN
P1
P2
•••
PN
•••
A1
D1M
A2
D21
•••
D2M
•••
DN1
•••
Network value ~
N*(M+1)2
DNM
AN
Phorizontal
D11
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••• D1M ••• D21 ••• D2M ••• DN1 ••• DNM
© Nokia 2016
Network value ~
(N*(M+1))2
Summary
IoT technology
Moore’s
law
Marginal
cost
Innovation
& user
adoption
Crossing
the chasm
Metcalfe’s
law
© Nokia 2016
zero
Network
value
IoT value
20
Standardsbased,
horizontal
platform
7.5X
36X
http://insight.nokia.com/how-big-internet-things-part-1
http://insight.nokia.com/how-big-internet-things-part-2
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© Nokia 2016