When the Internet of Things meets the App Economy

Simon Gannon

Forecasts and estimates of the number of Internet of Things (IoT) devices being built are truly astronomical.

Fifty billion devices will be connected to the internet by 2022 generating $1.9 trillion in economic activity, according to McKinsey.

Sitting on top of almost every IoT device on the planet will be an app, or more likely, a number of apps.

There is an ever-increasing velocity in the estimated number of connected devices that will be deployed on an annual or bi-annual basis until 2025 (which is about as far out as anyone is currently willing to forecast).

Industry analysts chart IoT growth as jumping from six billion devices on the internet in 2016 to 8.4 billion in 2018 to 20 billion by 2020 at a current and accelerating rate of over 5 million each day.

Yet the IoT phenomenon is probably being under-hyped. Respected bodies such as the IEEE say that the 20 billion devices by 2020 number is probably an underestimate, with 75 billion internet connected devices by 2025 now a regular forecast.

If the number of stars in our Milky Way galaxy is estimated at 250 billion, back here on Earth we are about to deploy a whole galaxy of apps onto the IoT devices soon to be in use.

Apps and IOT

Say the word 'apps' in public and people will most likely think of mobile phones, one of the global messaging apps or their favourite app store.

Ask about the Internet of Things and you'll most likely find yourself in a conversation about smart meters, voice activated assistants in the home or autonomous vehicles.

Yet both the App Economy and the IoT go far beyond these terms. When IoT and apps are considered together there is developing a tech and commercial universe of a scale which is difficult to grasp and challenging to map.

For example, the number of consumer devices and the apps that run on them are set to be dwarfed in scale by industrial B2B and B2B2C IoT and apps.

New connected devices and connected commerce apps will provide consumer, business and government clients with everything from smart street lighting to vehicle crash avoidance to machine-to-machine commerce.

Although diverse in form and function - think smart home, smart car, smart city, smart industry, industrial equipment sensors or connected home devices - these IoT and connected devices can be viewed as an infrastructure layer which will underpin the App Economy.

The App Economy stack includes the app development and app management sector, connected commerce, connected control, connected economy, device management, data and analytics.

Beyond the number of physical devices, the financial value of the IoT is forecast as worth a potential $11.9 trillion by 2025. (Source: McKinsey)

The number of apps which will run on the IoT being deployed across the planet will reach tens of billions in a very short time frame (the average US smartphone hosts 27 regularly used apps. Source: Statista).

How will IoT devices propel the App Economy?

Just look at some of the different markets being impacted by the development of IOT devices and apps.

  • Financial Services: Retail banking apps, payment apps, cashless society, security and identity management apps.
  • Manufacturing, Smart Cities: Ericsson has launched an IoT app development marketplace.
  • Mobile: 5G rollout is expected to spur a boom in mobile apps.
  • Media: Apps for smart TVs and connected devices have already transformed content distribution and consumption. New AR, VR and video apps are launched daily.
  • Public Sector: The World Bank issued a report: The Internet of Things, the new Government to Business Platform.
  • Fashion retail: Wearable technologies for health and wellbeing and increasingly fashion.
  • Healthcare: Remote medical monitoring built on 5G, IoT and apps could save 9.4 million GP visits annually.
  • Sports: Mass consumer adoption of IoT wearables for data capture and performance analytics could spur an app explosion.
  • Security: The UK Government estimates each home in the country has 10 connected devices and will add at least five more within the two years. It issued a security report, Security by Design, which was produced with the help of the National Cyber Security Centre.

IoT and App Developers

Today's smart developers are turning their attention to IoT ecosystems and considering the platforms on which to develop.

In the short term, the impact of new technologies can be wildly overestimated as excitement leads to hype. However, the global impact of technologies that make it through the hype cycle may also be vastly underestimated. As the numbers in the forecasts reveal, this looks set to be proved as the IoT meets the App Economy.

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