Machine Generated Broadband

One of the more interesting predictions in the latest Cisco annual internet forecast is that there will be more machine-to-machine (M2M) connections on the Internet by 2021 than there are people using smartphones, desktops, laptops and tablets.

Today there are a little over 11 billion human-used machines connected to the Internet. That number is growing steadily and Cisco predicts that by 2021 there will be over 13 billion such devices using the Internet. That prediction also assumes that total users on the internet will grow from a worldwide 44% broadband penetration in 2016 to a 58% worldwide penetration of people that have connectivity to the Internet by 2021.

But the use of M2M devices is expected to grow a lot faster. There are fewer than 6 billion such devices in use today and Cisco is projecting that will grow to nearly 14 billion by 2021.

So what is machine-to-machine communication? Broadly speaking it is any technology that allows networked devices to exchange information and perform actions without assistance from humans. This encompasses a huge range of different devices including:

  • Cloud data center. When something is stored in the cloud, most cloud services create duplicate copies of data at multiple data centers to protect against a failure at any given data center. While this does not represent a huge number of devices when measured on the scale of billions, the volume of traffic between data centers is gigantic.
  • Telemetry. Telemetry has been around since before the Internet. Telemetry includes devices that monitor and transmit operational data from field locations of businesses, with the most common examples being devices that monitor the performance of electric networks and water systems. But the devices used for telemetry will grow rapidly as our existing utility grids are upgraded to become smart grids and when telemetry is used by farmers to monitor crops and animals, used to monitor wind and solar farms, and used to monitor wildlife and many other things in the environment.
  • Home Internet of Things. Much of the growth of devices will come from an explosion of devices used for the Internet of Things. In the consumer market that will include all of the smart devices we put into homes such as burglar alarms, cameras, smart door locks and smart appliances of many kinds.
  • Business IoT. There is expected to be an even greater proliferation of IoT devices for businesses. For example, modern factories that include robots are expected to have numerous devices that monitor and direct the performance of machines. Hospitals are expected to replace wires with wireless networked devices used to monitor patients. Retail stores are all investigating devices that track customers through the store to assist in shopping and to offer inducements to purchase.
  • Smart Cars and Trucks. By 2021 it’s expected that most new cars and trucks will routinely communicate with the Internet. This does not necessarily imply self-driving vehicles, but rather that all new vehicles will have M2M capabilities.
  • Smart Cities. A number of large cities are looking to improve living conditions using smart city technologies. This is going to require the deployment of huge numbers of sensors that will be used to improve things like traffic flow, monitoring for crimes and improvement everyday things like garbage collection and snow removal.
  • Wearables. Today there are huge numbers of fitness monitors, but it’s expected that it will become routine for people to wear health monitors of various types that keep track of vital statistics and monitor to catch problems at an early stage.
  • Gray Areas. There are also a lot of machine-to-machine communications that come from computers, laptops and smartphones. I see that my phone uses data even at those times when I’m not using it. Our devices now query the cloud to look for updates, to make back-ups of our data or to take care of other tasks that our apps do in the background without our knowledge or active participation.

Of course, having more machine-to-machine devices doesn’t mean that this traffic will grow to dominate web traffic. Cisco predicts that by 2021 that 83% of the traffic on the web will be video of some sort. While most of that video will be used for entertainment, it will also include huge piles of broadband usage for surveillance cameras and other video sources.

If you are interested in M2M developments I recommend M2M: Machine2Machine Magazine. This magazine contains hundreds of articles on the various fields of M2M communications.

Too Many Gadgets?

ibm_chip1It seems that we have reached a point where the typical consumer thinks there are too many gadgets in his (or her) life and the average person is becoming less interested in buying new ones. A poll conducted earlier this year by Accenture showed that consumer demand for personal electronics is greatly reduced compared to recent years.

The drive to have personal electronics was spurred by the smartphone revolution, which has outperformed sales compared to almost any other product in history. But there have also recently been other personal electronics products like the Fitbit and health wearables that have done very.

But it looks like the shine might be coming off of the personal electronics industry. The Accenture survey showed that fewer people are considering buying every category of personal electronics. For example, the poll showed that only 13% of respondents were considering buying a new smartphone in 2016. That is far below the levels seen in recent years where a significant percentage of smartphone users upgraded their phone every 2 or 3 years.

And the survey also showed weak demand for wearables like Fitbit, for virtual reality, for drones and for the Internet of Things. If this poll is true, then all of these industries are going to underperform compared to expectations. We are certainly seeing this in the real world. Apple stock just stumbled due to falling demand for the iPhone. Samsung and the other smartphone makers went through the same thing last year.

The poll didn’t ask why this was so, but just measured consumer demand. I can think of several reasons why demand is down. First is cost. None of these personal electronics are particularly cheap and it’s unrealistic for the market to expect that all of these electronics will sell as wildly as is predicted by industry insiders. If you listen to the hype each year at places like CES you would expect that everyone in America will soon be buying drones and piles of IoT devices for their homes.

I think another primary reason for the decline is performance. My wife has a sports device to track her running. It works great for what she wants from it and there is no particular reason for her to upgrade it. And every runner she knows has one. Once the market for runners and walkers is saturated there is only so much that can be expected in demand for a device with such a specific function. There is just not much difference between the newer sports wearables and ones sold just a few years ago.

And performance is now a bit issue with smartphones. There is not much difference any more between one generation and another. The new smartphones look the same, feel the same and do about the same things and the old ones. And this is more the fault of the slowing of Moore’s law than anything else.

Since the early 70s chip makers like Intel have released a new chip about every two years that crammed about twice as many transistors into the same chip space. This is the primary reason why each new generation of the iPhone has been a noticeable improvement over the previous model. Each new chip has meant a big leap upward in speed, energy-efficiency and performance of the smartphone.

But in the 10-K filed with the Securities and Exchange Commission at the end of 2015 Intel disclosed that the pace at which it will launch new chips is going to be slower in the future. Intel’s latest mass-production chips for smartphones now have a gap between components of 14 nanometers. Physics is going to limit that ultimate gap to perhaps 4 or 5 nanometers at the smallest due to the size of the molecules of the chip materials. There isn’t very much more room for improvement.

This is not to say that there won’t continue to be improvements in computers – but soon the improvements are not going to come from more compact chips. There are amazing new breakthroughs coming in other areas. IBM has a new chip that works in 3 dimensions that has a lot of promise for supercomputers. There are computers becoming faster by using light instead of electricity. And there is a lot of promise from quantum computing. But all of these improvements, at least for now, are likely to help larger computers and don’t lend themselves to the cheap mass-produced chips that drive personal electronics.

And none of this means that the market for personal electronics is dead. There are still huge numbers of all of these devices being sold. But when you use the performance of Apple over the past decade as the way to measure success in the electronics world it’s likely that nothing is ever going to measure up to that yardstick.

This is a cautionary tale for any carrier that is considering selling home automation, energy management or security. There is a decent living to be made in all of these areas, but don’t get sucked into the hype that every home in America is going to want all of these devices and services within the next few years. Because it appears that is definitely not true.

Wearables Were Doomed to Fail

WearableOne thing I’ve noticed about tech is that the industry shows amazing exuberance for any new product. Just in the last few years we have seen huge sales forecasts for various home automation devices, for 3D printers, and for wearables. But all of these products have not done nearly as well in the market as industry analysts predicted.

We are certainly seeing that with wearables. Analysts had predicted that 90 million wearables would ship in 2014 and the actual count was closer to 52 million. And shipments should drop sharply again this year. It seems like every company that builds technology jumped into the fitness tracker market. It felt like a new brand hit the market every few weeks.

The exuberance for fitness trackers has me scratching my head. My wife runs long distances, and she did not see any reason to buy a fitness wearable. She uses a generation older technology which is basically a pedometer with GPS and that works well enough for what she needs. The device tells her how far she runs and can track her routes, and she feels no need to have a machine that tracks her 24 hours per day. If somebody who is a serious runner doesn’t see the sense in the device then there are probably not that many people who really need what a fitness tracker can do.

The market for the devices wasn’t helped when several studies last year showed that fitness trackers aren’t even very good at some of their basic functions like measuring calories burned. I never expected them to be because there are a lot more variables in that equation than just the steps that somebody runs.

The real question with fitness trackers or most other wearables is the value proposition they offer to people. How many people are willing to shell out the money and then use a device to tell them how many steps they have taken or how many calories they have burned? I think the people who made fitness trackers had an unrealistic hope that the devices were going to somehow change behavior and get millions of people off the couch and out running. But devices don’t change people. To be successful a device needs to be relevant and fit into our existing life. The device must have a compelling reason for us to use it.

Wearables in their current form don’t fit into very many people’s lives. They don’t, of themselves, make you fitter, thinner, or happier. They do supply you with basic data, but it now seems that we can get that same information for free from our smartphones. For a device to be successful it has to give people immediate satisfaction.

I think this is why the only two really successful devices recently have been the iPod and the smartphone. The iPod had a big market burst because everybody wanted to carry around all of the music they love. And the smartphone hit the market at exactly the right time. We already had a generation of people who were online and the smartphone added mobility to something we were already doing. But the smartphone didn’t stop there and it stays relevant by adding new amazing functions for those willing to delve into apps.

We now see fitness trackers morphing slightly into smartwatches. Apple is trying hard to paint the smartwatch as something brand new, but they look no more compelling to me. What can a smartwatch do that will significantly enhance my life if I am already carrying my smartphone? If the smartwatch makers can answer that question then they have a chance for success. If not, it will be another fad and a tech device bubble that will soon burst.

I hope I don’t sound too pessimistic, because I think the time will come when everybody will have a wearable. But we are a generation or more away from that time. We need a few more cycles of Moore’s laws to make chips smaller, faster, and more power-efficient. Almost every futurist paints a picture where the infosphere surrounds us wherever we go. And that probably means having some sort of computer that is always with us, and that means some sort of wearable. These future devices will take over all of the functions of the smartphone, and as such they will be wildly successful.

But there needs to be a number of breakthroughs made to get to those future devices. There needs to be a really accurate natural voice interface so that we can talk with our device easily. There needs to be some way for the future device to show us images, perhaps by broadcasting them straight to the lens in our eyes. When these devices become a true personal assistant we will find them compelling and mandatory. But until then, every device that does things that a smartphone can also do are doomed to market failure.