The Internet of Things (IoT) is quickly becoming such an integral part of our daily lives that we are starting to take it for granted. Yet, from an investor’s stand point, take it for granted you should not. The internet of things is the interrelated network of everyday devices connected to the internet to collect and analyze data, take action, and optimize performance. In 2018, the internet of things industry reached $130 billion in revenue and is expected to reach $318 billion by 2023 based on a compound annual growth rate (CAGR) of 20% according to a report by IoT Analytics.
To illustrate how extensive is the reach of IoT, look at Skyworks Solutions, Inc. (NASDAQ: SWKS), a semiconductor manufacturer for the IoT ecosystem in various spaces including:
- The automotive industry
- Home automation
- The industrial sector
- Machine-to-Machine (M2M) communication
- The medical field
- Mobile Devices
- Smart Energy
An example from the medical field was developed by DexCom, Inc. (NASDAQ: DXCM), which now has a small, wearable sensor and transmitter that sends glucose numbers to a smart device (phone or watch) or receiver every 5 minutes. It’s easy to wear, easy to use and completely eliminates the need for fingersticks for calibration, diabetes treatment decisions and diabetes management.
In the automotive industry, Tesla, Inc. (NASDAQ: TSLA) showed that IOT can be useful not just to update autopilot features, but also help Tesla owners facing a Hurricane. Earlier this year, when Hurricane Dorian was on its way to Florida, Tesla announced that company would boost the range of its Model 3 cars for a short period of time, enabling residents to travel further out of the range of the storm.
The common thread to all this technology is the remote-control capabilities and management. The power of IoT is the new previously unattainable possibility of companies like Tesla to communicate with its products, and tailor services based on the needs of their customers in real-time.