The Top 18 Internet of Things Trends to Watch in 2016

2015 was a huge year for the Internet of Things space—not just in hype, but in growth, movement, and development.

From our perspective, 2016 is ripe for continued evolution—not just around the application of sensors on ‘things,’ but around the myriad of forces and entities inherent in the entire ecosystem driving a more connected world. From technological advances, to market proliferations and consolidations, to societal constraints to economic pressures, the analysts at Harbor Research have compiled the top 18 trends and movements in 2015 that will define the Internet of Things in 2016 and beyond.

Trends-Picture-1024x696

This image depicts a variety of themes impacting the adoption of Internet of Things over the next 5 years. The vertical axis represents the impact such trends will have on enterprises and business, while the horizontal axis represents the consumer/social impacts such developments will have. Harbor Research predicts the likelihood for widespread adoption of these trends depends directly on the impact they will have on both businesses and consumers.

The article below is a summary of the full report we published on this topic, accessible here. Our full report takes a deep dive into each trend, including examples, analysis of the implications, and the key questions you should be asking as your business heads into the new year. Below we summarize the top 18 Internet of Things trends in 2016.

  1. IoT tiptoed into the mainstream in 2015. From SuperBowl commercials to political debates to Fitbit’s IPO to the Connected Home section at BestBuy, the Internet of Things reached into mainstream culture in 2015.
Google Trend Graph for the search term “Internet of Things” 2013-2015 (Source: Google)

Google Trend Graph for the search term “Internet of Things” 2013-2015 (Source: Google)

  1. 2015 brought the greatest adoption of connected products and services to date. Thanks to sharp declines in the cost of sensing technology and data processing, Harbor Research finds some 3B connected devices came online in 2015, with significant adoption across both Transportation and Buildings sectors. 
  1. Confusion around what IoT is (or isn’t) persists. Despite massive investment and adoption, most people are still perplexed by what the Internet of Things (or should we call it Digital Transformation? Industry 4.0? Machine-to-Machine?) actually means.
  1. The Internet of Things dominated mergers & acquisitions in 2015. The M&A climate of 2015—one of numerous divestures and megamergers, particularly in the semiconductor space— can well be characterized by movement directly related to the Internet of Things.
  1. 2015 brought legislative rumbles to the IoT space. World over, governments are struggling to address the Internet of Things. Yet, 2015 brought significant legislative movements primarily in the areas of data access and security.
  1. The IoT platform space exploded in 2015, but it’s still highly fragmented. Proprietary development and acquisition by tech giants call attention to the IoT platform space; meanwhile, hundreds and hundreds of new IoT platform innovators continue to proliferate.
Harbor Research tracks players across the IoT ecosystem. Our database contains more than 1800 IoT technology providers, and over 500 IoT platforms.

Harbor Research tracks players across the IoT ecosystem. Our database contains more than 1800 IoT technology providers, and over 500 IoT platforms.

  1. Consumer IoT and Industrial IoT are colliding. From Apple Watch for field technicians to Microsoft Kinect in the grocery store, enterprises are applying (and saving costs) with consumer technology. Although consumer and industrial IoT have been largely bifurcated in ecosystem, adoption, and investment, 2015 saw the beginnings of the end of this distinction.
  1. Blockchain sets the precedent for a digital economy (way beyond Bitcoin). The information architecture inherent to Bitcoin provides a powerful precedent for the development, contextualization, exchange, and security of data needed for IoT.
  1. The Collaborative Economy booms… and provides a precedent for IoT. Despite regulatory constraints, 2015 saw continued disruptive growth of ‘shared’ services, illustrating the power of collaboration and ecosystems, made possible by precisely the same components inherent to IoT architecture.
  1. Customer experience is evolving in the direction of IoT. From retailers incorporating sensors into mobile appls to chip cards and mobile payment redefining the transaction process, 2015 brought a number of important developments in the evolution of ‘customer experience,’ many driven by IoT technologies.
  1. 5G, the next cellular generation is taking shape. Mobile operators are vying to achieve super fast, efficient, and flexible data networks in order to adequately support IoT applications at scale. Meanwhile, alternative connectivity protocols are evolving rapidly.
  1. Machine Intelligence evolves into ‘killer’ software app. Computers are learning to read, write, learn, think, and even understand human sensor input such as touch or hearing. Today companies are buying 50x more data to train AI programs in development than they were just 3 years ago.
  1. Image will be the next frontier of data capture, but remains infantile. Many of the emerging technologies of the past few years— 3-D technology, cameras, facial recognition, computer vision, augmented reality, image & video analytics—are all components to sensing and analyzing the look and feel, (not just the sentience or behavior) of our digital and physical worlds. Still, immediate technological, economic, and societal hurdles remain.
  1. Robots are emerging (beyond manufacturing). 2015 saw emergence of robots in new industries such as retail, hospitality, and healthcare, bringing us telebots replacing call-center agents, connected industrial floor cleaners, automated guided vehicles (AGVs), robotic retail associates, and a host of robotic “personal assistants.”
OSH_Robbot

Orchard Supply Hardware, a retail chain owned by Lowe’s, is testing its customer engagement robot, OSHbot to help customers search, locate, and learn about items.

  1. Augmented reality poised to accelerate in 2016. 2015 brought significant movement for the AR space with numerous brand experimentations as well as major acquisitions and movement on the part of Google, Apple, and PTC. Already, a variety of other technology companies have announced they’ll be following suit in 2016.
  1. Drones (and drone investment) took off in 2015. From legislative movement to retailer experimentation to consumer adoption, the year brought shocking growth to a technology segment which, just a few years ago, was expected to putter along. Investment grew nearly tenfold in 2015 alone.
  1. ‘Low Power:’ A most powerful (but challenging) catalyst. 2015 brought the rise of Sigfox, greater adoption of low power beacons, and significant attention to edge computing, but the fate of IoT still remains at the mercy of more efficient distributed power consumption at every level: connectivity, hardware, chip, battery, storage, etc.
  1. IoT is pushing movement across the value chain. 2015 brought numerous examples of traditional companies driving bottom line growth (to core products and services) by investing, integrating, acquiring, or expanding into entirely new offerings and relationships.

Trends and forces shaping IoT in 2016 abound. The deeper business and societal opportunities of data generated by connected interfaces and devices far transcend the endpoints (e.g. products) themselves. The real value potential in an IoT-enabled world lies in the services made possible—via collaboration, partnerships, predictive intelligence, and entirely new value-adds, offerings, and business models. Ultimately, the ‘many-to-many’ model of the Internet of Things requires a narrative shift. It requires a disruption to the current way of doing things; our existing paradigms around who should pay, ‘core competency,’ security, privacy, [data] ownership, technological architecture, and many other market levers. These themes pervade the trends discussed above, and will continue to define IoT adoption in 2016 and beyond.

You can access Harbor Research’s full 2016 Trends in IoT Report at no cost here.

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