Apple recently caused a flurry of excitement due to its recent announcement that HomeKit—a framework for communicating with accessories via smartphone—will soon be able to control a wide range of connected devices such as motion sensors, home security systems and carbon dioxide monitors. Throughout the next 10 years more than 50 billion Internet-connected devices will flood the consumer market. This creates opportunities for smart companies like Apple to organize this proliferation of devices into a seamless whole by building simple, user-friendly interfaces. While companies are scrambling to get a piece of the IoT market, they should also consider the effects the IoT will have on electronics purchasing.
The convenience of ordering online has lost its luster after bursting onto the market years ago. Increasingly, consumers want to know the real-time location of their orders from click to doorstep. The emergence of the IoT opens the door for a host of unprecedented tracking solutions using existing technology such as disposable GPS and RFID. The global network brought about by the IoT will help to expand real-time order tracking beyond a mere handful of e-commerce sites to give buyers the shipping information they desire regardless of where their order was placed.
Real-time tracking also has the potential to disrupt traditional pricing models in the electronics industry. Sensors will increase the ease of monitoring and comparing vendors, tracking orders and managing inventories. This will create new pressures and opportunities for distributors to reach customers with high-service expectations.
Without sensors, real-time tracking is not possible. Using wireless networks, sensors are able to gather important information, analyze data and deliver vital environmental information to users. Major players in the tech industry have jumped at the chance to get more involved with sensors. IBM, for example, plans on investing $3 billion in a new business designed to evaluate data from smartphones and other sensor-equipped devices.
IC Insights estimates the expanding need for devices connected to the Internet will drive the price of sensors down at a compound annual growth rate of negative 5 percent for the next five years in a row. Because sensors play such a crucial role in the IoT, an increased demand for them could lead to supply shortages and as well as changes in pricing as purchasers compete for limited supplies. The demand for real-time purchasing data could limit the availability of the very technology needed to make this become a reality for buyers. Manufacturers must be prepared to meet those demands head-on.
The Internet of Things has the potential to significantly change electronics purchasing. The ease of real-time order tracking presents a massive opportunity for buyers who want more control over pricing and down-to-the-minute information about their orders. But if consumers and buyers both demand such connected technologies and real-time insights, the sensors market could see sharp fluctuations in availability and pricing that may negatively impact engineers. IoT could have a significant impact on purchasing that extends far beyond the buyer, and all participants in the electronics ecosystem must consider the role they play in this emerging balance.
About the Author
Sagar Jethani is Head of Content for element14, the world’s largest online community of design engineers and technology enthusiasts with more than 340,000 members and counting. Learn more at www.element14.com.