The Industrial Internet of Things (IoT) is a network of physical objects, systems, platforms and applications that contain embedded technology to communicate and share intelligence with each other, the external environment and with people.
The IoT market is supported by various growth drivers surging demand of collaborative robots and booming economic growth. The rise of lower power wide area (LPWA) network technology, rising IoT platform, application and security spending are factors that are driving the IoT market.
The global Internet of Things Market is a fast-growing one. It is forecasted to witness a slow but steady growth by 2020 according to a recent study report published by the Market Research Future. This will be a surplus growth at a moderate CAGR during the projected period of 2016-2022.
Japan is a highly developed economy with a booming telecom industry. Its rapid development of the Internet of Things embodies Japan’s obsession with robotics and other cutting-edge technologies as well as reflects a practical mechanism to cope with its aging society through reduced human resource costs.
IoT applications began in Japan grinding slowly but steadily, with minimal hype. Today, there are more than 3.17 million individual IoT (SIM card) subscriptions in Japan. NTT DoCoMo has more than 1.5 million users, mostly from the sectors of transportation, surveillance, remote payment (including vending machines), logistics assistance, and remote metering. KDDI focused on high-speed, large-capacity IoT communications from the very beginning and has acquired more than one million users in the transportation and logistics sectors through in-vehicle, small-scale, lightweight, and low-cost IoT communications services. SoftBank which is a recent telco entrant has a little more than 250,000 subscriptions; most of its relevant products involve consumer electronics, along with a small number of elevator surveillance and vending machine devices.
Japan’s telecom industry has high hopes for the Internet of Things. It is expected to boom in such sectors as telemetering, transportation management, e-payment, surveillance, digital signage, and data backup, thereby bringing huge business opportunities by creating new areas of growth in the already saturated Japanese mobile market.
The most popular IoT services in Japan currently involve vending machines, transportation management, surveillance, and e-wallet services. Most of the IoT applications such as surveillance, billing, and payment do not consume much bandwidth. In fact, more than half are supported by 2G networks; for those that require 3G support, a bitrate of 384Kbps is sufficient.
Japanese telcos expect IoT-related video applications to multiply, as remote diagnosis and medical training are becoming commonplace. Remote video surveillance for transmission lines, emergency repair monitoring, and scheduling and control will be required for any smart power grid. Video-based city security surveillance and management will be common in almost all smart cities. LTE, with its superior capacity, will better support the real-time IoT of tomorrow.
While still committed to industrial development, operators as NTT DoCoMo and SoftBank believe that IoT applications can be scaled up quickly for consumer products such as digital photo frames, e-books, communications devices for children, and electronic pet collars. To promote IoT growth, Japan’s communications industry is working to adjust its business model. Her IoT subscriptions are expected to grow by eight million over the next three years.
On a general note, Japan’s approach to IoT has yielded a lead over the Western hares. Some lessons drawn from Japan are:
- The Internet of Things enables operators to create new revenue sources in an already fiercely competitive mobile market.
- Successful IoT promotion requires both technical and business model innovation. A flexible business model can be employed to stimulate cooperation between actors in the value chain.
- IoT developers must respect the industrial standards already in place; they should also focus on communications access layer services for the Internet of Things as well as M2M modules and service gateways to facilitate operational management and maintain core competitiveness.