Take me to the Internet! (of things)
As you probably know by now, wirelessly connected gadgets of all kinds are now collecting data, interpreting it, and making our lives a heck of a lot easier. From traffic alerts, online shopping reminders, healthy living habits, etc. This is nothing new. However, the rate at which our habits and interests are being captured and analyzed has increased at an alarming rate. Just watch the Netflix documentary “The Social Experiment” and you’ll think twice about grabbing for your iPhone after dinner. The documentary essentially concludes two things: 1)that we are real-life addicted to the “instant gratification” that is social media and 2) companies are using advanced algorithms to predict our behavior.
Nevertheless, we are moving toward a new digital world of intercommunication among all physical objects. In the new world, the goal will be to make our daily lives more efficient while rewarding us with the an equally valuable asset, TIME. The rollout will accompany the launch of 5G and is better known as “Internet of Things”.
Simplified, “I.O.T” describes a time when a bunch of our stuff will be wirelessly connected to the Internet and working in unison with the rest of our devices. As an example, your refrigerators sends a notification to your car’s GPS that you are out of milk and programs a Publix pitstop on the way home. Or your alarm clock wakes you up unexpectedly to let you know that that you forgot to take the trash out and you have 9 minutes before the truck arrives because the clock is tracking the truck! These would be two obvious benefits with everything be interconnected.
However, there are three challenges that come with this new world and may pose as a long term investment opportunity
For one, it’s called the Internet of Things but in reality, it’s the Internet of Sensors. Thousands of internet sensors, collecting data on a continuous basis.
So with sensors that are constantly monitoring, power usage will be important. Look for companies that are focused on allowing users to stay connected for longer periods of time.
The second challenge is security. With so much information about our personal lives flying around, it will be extremely important that consumers feel confident with the protections in place. Cyber security companies as an example will look to continue to build out their platform over the next several years.
The last challenge but maybe the most important is cross-company communication. As much as Apple wants you to only buy Apple products, it will be imperative that different brands operate on a “uniform code” (same language) so that data is translated correctly.
The idea is that with the build out of 5G over the next 4 years, the devices capable of carrying a Bluetooth connection should expand rapidly. Refrigerators and Trash cans are just the tip of the iceberg. If you are ever interested in discussing “I.O.T” and the investment themes associated, give me a call at the office!
- Patrick
