China Emerging as Internet of Things Leader

Software will be key to growth opportunities for the consumer Internet of Things in that country, according to an IoT technologist.
By IOT Journal
Jan 16, 2018

PRESS RELEASE:

For over 30 years, Silicon Valley has been known as the world's center for digital innovation, but that perception is becoming as fresh as a flip phone. China is determined to become the world leader in the IoT, and just launched the second half of a ten-year, $US60 billion plan to cultivate domestic innovation in this space. Global IoT players with an eye toward success are thinking less about competition and more about cooperation.

In a keynote address delivered at the recent World Internet of Things Convention (WIOTC) in Beijing, noted IoT authority Viktor Ariel, PhD, Founder and CEO of SURE Universal, lauded China's remarkable IoT success in the industrial sector. At the same time, he cautioned that hardware alone will not maximize business opportunities for the IoT, and that "the competitive success of new IoT initiatives, particularly in the consumer space, will be driven by software."

Despite China's IoT successes so far, several government officials at the WIOTC noted room for improvement, particularly in the consumer space. It is here that Ariel sees an Achilles heel in China's IoT capabilities, and the best opportunity for global players in the coming IoT markets. Software products that add value to hardware, such as SURE Universal's IoT controller application, will be the driving force in the consumer IoT. "Software is obviously the opportunity," says Ariel. It will be difficult for anyone to compete with China's lead in IoT hardware,"

As might be expected of a manufacturing economy, China's IoT efforts have so far focused on the industrial sector. Manufacturing facilities featuring sensor networks and robotics are commonplace in China, which easily leads the world in the number of devices deployed. Relative to the US, the Chinese smart home and consumer IoT markets remain underdeveloped, but that may not be true for long, as China is home base for the majority of the smart home and connected device manufacturers.

Says Ariel, "In order for the IoT to have value to the consumer, the software needs to achieve a number of technical and marketability milestones. First, there needs to be device interoperability and data security, both of which are essential. The next level is great user experiences and new services. The most mature level is the development of business models and monetization that works."

Ariel's SURE Universal is a leading voice for IoT interoperability. The company developed the software-defined IoT control solution for smart home, which was the first product certified by the Open Connectivity Foundation (OCF), a global consortium dedicated to IoT interoperability. "In China, there are more than a dozen IoT standards to choose from," says Ariel. "Nobody wants this. Consumers need for this experience to be transparent; that's why there was the need for the open source OCF standard to begin with."

"Software as a solution is a process," Ariel continued. "Consumers must have the interoperability and device security, or else there would be no adoption. Once you've got adoption, then you can talk about next-level improvements, like user experience, artificial intelligence, voice control and the like. Once you move past that, you can start implementing software-as-a-service applications using AI and machine learning, such as e-commerce, insurance, healthcare monitoring, energy savings and the like. Finally, once all those bridges have been crossed, you're ready to monetize those services. Western companies are good at this, and this is what represents their competitive advantage. The overall value is mostly achieved in software, and that's where China will need to focus it efforts."

China's consumer-facing IoT won't mature as quickly as its industrial cousin without the adoption of unified software IoT strategy, says Ariel, "Companies that are competing in the consumer IoT need to think of software as their competitive advantage, and how their products can work together to deliver the maximum value to consumers and IoT vendors alike."

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