SIEMENS

Virtually invisible to most of us, powerful software modules have long since become indispensable for managing the flood of information on the Internet. According to an analysis of the U.S. company Cisco, over 50 billion devices will be connected to the Internet by 2020, ranging from smartphones, PCs, and ATMs to manufacturing equipment in factories and products in shipping containers. Market research firm Gartner regards the Internet of Things as one of the strategic technologies of our time. Meanwhile, solutions for identification, analysis, and communication are expected to reach a critical mass in the next five years and become useful economically. According to Gartner, the essential elements of the Internet of Things include integrated sensors in devices and objects, image recognition via handset cameras, and payment by means of near field communication (NFC). In NFC payment systems, users place their cell phones in the vicinity of an NFC reader in order to pay for purchases.
The first applications for the Internet of things already exist — in toll collection, navigation systems, remotely readable meters in decentralized energy systems, and in automated warehousing. There is now even a Dutch start-up company that equips cows with sensors that report illnesses or pregnancy. According to the Fraunhofer Institute for Microelectronic Circuits and Systems in Duisburg, an active transponder system located in the stomach of the cow identifies relevant parameters, such as the pH value of the blood and the temperature, and transmits this data to an external receiver on the cow’s collar. From there, the information is forwarded to a central database through a wireless network of sensors. If the cow’s blood pH value is too low, for instance, the farmer receives a warning message on his PC. In human beings as well, ECG sensors on the body could monitor cardiac activity and display up-to-date data on the condition of an individual through a smartphone.
According to the Association of German Engineers (VDI), the most promising applications include health telematics, house and building automation, industrial production, and logistics.

Market researchers at Forrester Research likewise see considerable potential in the logistics industry. “In recent years, the costs for a simple fleet management device have fallen by 50 percent to an average of $100,” explains Forrester analyst Michele Pelino. In the system envisaged by the Fraunhofer Institute for Material Flow and Logistics (IML) in Dortmund, Germany, each package and each shipping container will find the right path to the recipient by itself. The destination will simply be written into intelligent labels. “This way, each package knows where it has to go, and it reserves its own spot in a transport vehicle,” says Professor Michael ten Hompel, Director of the IML.
The technical foundation for connecting everyday objects to networks is radio frequency identification — RFID. In this technology, the data carried by the chip attached to an object is transmitted via wireless links. As the VDI puts it, this turns “low-cost articles into smart objects.” RFID systems can be used wherever automated labeling, identification, registration, storage, monitoring, or transport are necessary.
According to a study conducted by Frost & Sullivan in 2011, the global RFID market of $3 billion to $4 billion (in 2009) will grow by twelve percent per year through 2016 and reach a volume of approximately $6.5 billion to almost $9 billion. “In coming years, every device will be connected to the Internet. The trend will extend to every industry and every sphere of life,” says Cisco Chief Futurist Dave Evans, who predicts a boom for the Internet of Things.
Market researchers expect that smartphones in particular will play a major role in bringing the Internet of Things to consumers and that they will foster the development of many attractive new applications. “Suppliers of smartphones are making a very noticeable effort to enhance the functionality of these devices with sensors in order to support new business models,” says Dr. Gerrit Tamm, a professor of information systems at SRH Hochschule Berlin.
What’s more, 80 percent of all households in the European Union are expected to have intelligent power meters by 2020. If an intelligent control unit is added to such meters, they can start up washing machines, cooling systems or heat pumps all by themselves during times when electricity rates are low.
In “intelligent houses,” wireless sensors will control lighting, energy management, and security systems. An analysis carried out by market research company Marketsandmarkets predicts that the need to save energy will be a primary driver of the market for smart homes. A building’s energy management can then be monitored and administered remotely via a smartphone or a PC. Market experts predict that this global market, which represented $5.3 billion in 2010, will grow to $11 billion by 2015.
The Internet of Things is considered an important issue for the future in China as well. In February 2012 the Chinese government therefore decided to set up a fund of approximately $775 million to support this field in the next five years.
The official Chinese market for the Internet of Things, which comprises a broad field that includes safety, security, and environmental technology as well as health monitoring equipment, had a volume of approximately $31 billion in 2010. This sector is expected to grow to $116 billion by 2015, according to a report published by the Xinhua News Agency in late 2010.
In May 2010 a group of experts named “EU-China Internet of Things” was established. Its objective is to promote technological innovations and uniform standards in Europe and China with regard to the Internet of Things. However, in addition to discussing the opportunities opened up by this new field of technology, experts in Europe are also devoting considerable attention to potential effects on data protection and privacy. Plans also call for these issues to be investigated and addressed on the international level.