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ETSI IoT keynote (2016)

"How Big is the Internet of Things?", keynote presented at the ETSI IoT/M2M workshop, Sophia Antipolis (France), May 2016

mjadoul
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ETSI IoT keynote (2016)

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  1. How big is the Internet of Things? Marc Jadoul ( @mjadoul) ETSI IoT/M2M Workshop Sophia Antipolis, 17 November 2016 1 1 © Nokia 2016 © Nokia 2016 © Nokia 2016

  2. About this presentation https://en.wikipedia.org/wiki/Nabaztag 2 © Nokia 2016

  3. Moore’s law (1965) The number of transistors in a dense integrated circuit doubles approximately every two years performance Y = Nx cost time 3 © Nokia 2016

  4. Micro-processor evolution has followed Moore’s law Sparc M7 10G 22 Core Xeon 15 Core Xeon SPARC 64X 8 Core Xeon 16 Core SPARC T3 6 Core i7 8 Core POWER 7 POWER 6 1G Number of transistors Core i7 Core 2 Duo 100M AMD K8 Atom Pentium 4 AMD K7 Pentium III AMD K6 10M POWER 1 Pentium II Pentium I AMD K5 PowerPC 601 1M 80486 68040 80386 68020 80286 0 68000 ARM2 8086 8088 8085 10k 6809 6800 8080 Z80 8008 6502 4004 1k 1802 4100 TTL CMOS 100 1965 1970 1980 1990 2000 2010 2016 4 © Nokia 2016

  5. 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 2010 2012 2014 2016E 2018E 2020E Source: Goldman Sachs & BI Intelligence, 2015 5 © Nokia 2016

  6. 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 # 6 © Nokia 2016

  7. Facebook growth has been following Metcalfe’s law 30,000 2016E Revenue (million US$) 25,000 2015 20,000 2014 15,000 2013 10,000 2012 2011 5,000 2010 2009 2008 0 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 Monthly Active Users (millions) 7 © Nokia 2016

  8. IoT value will come through Metcalfe’s law Estimated number of installed IoT devices (billions) 25 20 15 10 5 0 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E Source: BI Intelligence, 2015 8 © Nokia 2016

  9. Everett Rogers’ diffusion of innovation (1962) Market penetration 100% Market share 70% 34% 34% 50% 13.5% 16% 25% Market diffusion 2.5% 0% Innovators Early adopters Early majority Late majority Laggards 9 © Nokia 2016

  10. 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. 10 © Nokia 2016

  11. Many IoT devices and apps are still stuck in the chasm Worldwide wearable device shipments (million units) 8.1 5.7 4.8 4.7 4.4 4.1 3.9 3.9 3.7 3.7 3.6 3.1 3.1 2.8 2.7 1.6 1.6 1.5 1.0 0.9 0.9 0.7 0.7 Fitbit Xiaomi Apple Garmin 1Q2015 2Q2015 3Q2015 4Q2015 1Q2016 2Q2016 Source: IDC Worldwide Quarterly Wearables Tracker 11 © Nokia 2016

  12. Clayton Christensen's innovator's dilemma (1997) It is in disruptive innovations, where we know least about the market, that there are such strong first- mover advantages. This is the innovator’s dilemma. Disruptive technology should be framed as a marketing challenge, not a technological one. 12 © Nokia 2016

  13. Crossing the chasm Metcalfe’s curve Moore’s curve Technology driven Value driven 13 © Nokia 2016

  14. 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. 14 © Nokia 2016

  15. The IoT is enabling a zero marginal cost value model =∞ av mc lim mc→0 av is the added value, mc is the marginal cost of an IoT service 15 © Nokia 2016

  16. So, how big is the IoT’s (potential) value? 16 16 © Nokia 2016 © Nokia 2016 © Nokia 2016

  17. Moore’s Law applied to the IoT 100 Component density (Billions per area) 10 8X increase in performance or 8X drop in price for a given performance 1 2013 2014 2015 2016 2017 2018 2019 2020 2021 17 © Nokia 2016

  18. Metcalfe’s Law applied to the IoT 100 Connected Users/Devices (Billions) Connections squared (Billions) 58.1 7.5X the value of the Internet In 2020 20.8 10 7.6 7.8 6.4 5.5 4.9 3.8 3.4 3.2 3.2 3.0 36X the value of the Internet in 2016 3.0 1.9 2.7 1.6 1.4 1.2 1.2 1 1.0 2013 2014 2015 2016 2017 2018 2019 2020 2021 Internet users IoT connections Internet value IoT value 18 © Nokia 2016

  19. A standards-based, horizontal IoT platform can boost the value of the network A1 A2 AN ••• Network value ~ N*(M+1)2 P1 P2 PN ••• D11 D1M D21 D2M DN1 DNM ••• ••• ••• A1 A2 AN ••• Network value ~ (N*(M+1))2 Phorizontal D11 D1M D21 D2M DN1 DNM ••• ••• ••• ••• ••• 19 © Nokia 2016

  20. Summary IoT technology Moore’s law Marginal cost zero Innovation & user adoption Crossing the chasm Standards- based, horizontal platform Metcalfe’s law Network value 7.5X 36X IoT value 20 © Nokia 2016

  21. http://insight.nokia.com/how-big-internet-things-part-1 http://insight.nokia.com/how-big-internet-things-part-2 21 © Nokia 2016

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