Wearables and home devices are likely to lead growth in the Internet of Things (IoT) business during the rest of this decade, according to semiconductor companies and industry analysts at the Computex Taipei show that wrapped up last week.

This year, 72 million wearable devices worth $17 billion will ship, growing in dollar terms at a compound annual growth rate (CAGR) of 18 percent to 156 million units or $39 billion in 2019, according to Bryan Ma, a vice president with market research firm IDC. But exactly what device is likely to be the wearable of choice?

“If I were a betting man, it would be watches,” said James Bruce, director of mobile solutions for ARM, whose chip designs are in 90 percent of the world’s smartphones,” in a Computex presentation. “Wrist-based products are definitely going to be one of the leading categories. We’re at the start of that growth.”

Overall, the worldwide IoT market will grow from $655.8 billion in 2014 to $1.7 trillion in 2020 for a CAGR of 16.9 percent, IDC said in a June 2 report. That growth forecast appears less optimistic than a prediction this month by market watcher Linley Gwennap for a CAGR of 45.5 percent in IoT unit shipments between now and 2020. Gwennap said 1.9 billion IoT devices will ship in 2020, up from about 200 million this year.

Developing use cases
It will take time for wearables to become compelling, according to ARM.

“It took years for smartphones to develop their various use cases,” Bruce said. “We’re now seeing the same thing with wearables. Three or four years down the line, you’ll see lots of different people using wearables.”

For mobile payment or access to a home or a car, a watch with near field communication (NFC) makes sense because of the ease of use, Bruce said.

For home IoT devices, use cases are developing rapidly in China, according to MediaTek, the world’s third-largest chip designer.

“The home IoT market in China is growing faster than the rest of the world,” said SR Tsai, general manager of MediaTek’s Wireless Connectivity and Networking Business Unit, in an interview with EE Times.

The home IoT market worldwide this year will reach 50 million unit shipments and 200 million units in the next three years, Tsai said. That forecast converts into a bullish CAGR of 59 percent for the three-year period.

In China, some companies have started adding WiFi-controlled smart switches to air conditioners and other home appliances, according to Tsai.

China’s Xiaomi, the world’s third-largest smartphone maker, and other local handset makers are trying to deploy IoT as part of their business, Tsai said. Helping to stimulate demand, the Chinese government will invest about $200 billion during the next three years in domestic broadband access for fiber to the home at a 10 gigabit-per-second rate, he added.

Security issues
Still, security issues may become a limiting factor in China’s burgeoning home IoT business, according to Tsai.

“Their security concerns are lower than in other areas,” he said. “Smartphones are the personal gateway, but you still need a home gateway.”

According to research by security software vendor Trend Micro, about 30 percent of the routers in the marketplace have been hacked, Tsai said. MediaTek and Trend Micro have allied to provide security against attacks on home networks.

“If your router transfers a lot of data outside, we can stop this kind of attack,” according to Tsai. “Rather than securing the end device, as with laptops years ago, now it’s better to secure at the gate in home routers.”

In a smart home, air conditioners, refrigerators and doors are links in the network that could potentially leak valuable personal data to outside hackers, Tsai says.

“If they are breached, you are in big trouble.”

By: DocMemory
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