We've been hearing more and more about "The Internet of Things" and "The Connected Life," so what does that really mean for those of us inside the industry? By and large, the concepts and state of being represented by these terms has been here for quite a while. The proliferation of smart wireless devices with a healthy array of software applications (apps) has enabled us to manage many aspects of work and personal life from the convenience of our most portable smart wireless devices (SWD), whether smartphone, tablet, "phablet" (newer phone-tablet devices), or laptops.
The idea of Machine-to-Machine (M2M) connectivity is far from new, rather it goes back to the inception of computing itself. What has changed and is on the rise, is the expansion of M2M into individual lives and the devices that previously did not have the chipsets and processors that allowed for connectivity and then remote operation. Why do I want or need to run my dishwasher, oven or regulate my thermostat from a remote location via my SWD of choice? Beyond the "because I can" factor, comes a much more economic and environmental set of reasons, energy efficiency which brings with it cost reductions for the user and better demand (load) management for the utility company. This type of electricity use management is the home point of the Smart Grid, and little by little, the connectivity to enable the Smart Grid is becoming reality.
The increased movement to "Smart Homes," where all durable goods and home electronics, such as appliances, thermostats, home alarms, TV entertainment systems, computers, etc., are connected, is possible because of the standardization of protocols (Wi-Fi, Zigbee, Bluetooth, etc.) for low-powered systems combined with the significant decreases in cost for the sensors and MCUs required in the devices themselves (see this reprint in Phys.Org and Honda's Smart Home unveiling in Japan).
The continued widespread adoption of smartphones and tablets is at the core of these price declines because of economies of scale and increased competition that has opened the market to move beyond SWDs. Furthermore, with the added challenges to provide smart charging options for all of the new and forthcoming owners of electric vehicles (EV), Smart Homes, such as Honda's recent demonstration, and the Vehicle-to-Grid (V2G) connectivity leveraging the Smart Grid will increase alongside of the semi content in all of the points along the connection (read about the IBM, Honda, PG&E joint venture for V2G). Notable in the increased penetration of semiconductors is the rapid rise of automotive semi content due in part to feature demands, which include increased infotainment and in-vehicle connectivity as well as mandated safety and fuel efficiency standards.
As demand increases for more M2M communication and increased connectivity throughout all aspects and devices in our inter-connected lives, the forecasts for growth in revenue and unit volume in the semiconductor and electronics industry will continue to be extremely robust. After all, at the core of every connection is a chipset and a device that will be sourced from our interconnected supply chain. Watch for more in depth discussion on automotive semiconductor penetration in our Special Series on Mobility, and more about the Connected Life in our upcoming Smith MarketWatch Quarterly, available late June, with a free subscription.