The Numbers Game

How many IoT devices will there be? Pick a number, any number.

popularity

Industry executives making presentations on the Internet of Things often cite the famous estimate by Cisco Systems – 25 billion connected devices in 2015 will double to 50 billion connected devices in 2020. Also, the worldwide IoT market will grow 21% a year to $7 trillion by the end of this decade, according to IDC.

Billions and trillions are at stake.

Many chip companies, especially Intel and Qualcomm, are on the case, developing a plethora of devices for the IoT. System companies, such as Hewlett Packard Enterprise (HPE) and Hitachi, have launched IoT platforms. Cisco itself isn’t letting the parade go by, snapping up Jasper Technologies, a provider of cloud-based IoT service platforms, in March, for $1.4 billion in cash and assumed equity awards.

Ask people in Silicon Valley how large the IoT device market will get, and the honest answer is typically, “Really big. A lot of devices.” The truth is, no one really knows how many devices will be sold, for whatever amount of dollars.

Narbeh Derhacobian, president and chief executive officer of Adesto Technologies, recently wrote on TechCrunch, “The PC and smartphone industries were able to deploy the same chip designs for hundreds of millions of units. The giant integrated SoC fabs were well-suited to this. But IoT is different; it will likely consist of thousands of one-million-unit applications. This would suggest the need for a much greater diversity of chip configurations than we’ve seen to date.”

To put it in marketing groupspeak, the IoT represents a paradigm shift in semiconductor design and manufacturing. In other words, things are changing, and the knowledge of not knowing how this will turn out is enough to provoke anxiety and uneasy feelings all over Silicon Valley and around the world.

IoT is going to be great for the semiconductor industry, people will say, and yet they can’t adequately describe how it will be great, or how great it will be.

Well, relax, everyone. As William Goldman, the famed author and screenwriter, once said of Hollywood and the Tinseltown trade, “Nobody knows anything.” And yet studio executives will commit hundreds of millions of dollars toward production of a movie, with no guarantee or idea of how it will do at the box office. It’s time for semiconductor industry denizens to acknowledge that nobody really knows anything about the Internet of Things, and that’s all right.



  • TheDoktor42

    Jeff, your assessment is spot on. From observing many more inaccurate demand forecasts on traditional processors and chipsets in a heretofore stable market than I’d care to admit, any of these IoT forecasts should be viewed with a few grains of salt. I agree that the potential for unprecedented growth is there, but without a more systematic and coordinated approach that rationally connects all the disparate elements of measurement, control and analysis to actual solutions, I’m hard pressed to see how these lofty predictions can ever be realized.