Kwok-Cheung Ellis Hung, Chairman of A4 Data Technology, Inc, delivers a speech at the forum on world internet & modern logistics of the 3rd World Emerging Industries Summit (WEIS 2015)

Speaker: Ellis Hung

Topic” “Key Opportunity and Development for Internet of Things, Smart City and Big Data”

Date: April 22, 2015

Speech script:

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Today, I would like to share my thought  on “Key Opportunities & Development for IoT, Smart City and Big Data”in different part of world.

World is CHANGING FAST NOW & FUTURE

The whole technology industry is driving the change of our life for good… almost in every part of our daily life. IoT, in particular, just starts to touch our life & becomes key to our future. Many technology giants like Cisco, Intel, IBM, Google…. spend millions & billions dollar betting on this new gold rush. IoT can apply to many different industries including, but not limited to, Smart City, Smart Manufacturing, Smart Logistics, Smart retails, Smart Healthcare/Aging Smart, Smart transportation, Smart Car, Smart Parking, Smart Environmental Protection …



IOT:

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You may ask

• how big is this IoT industry and opportunity?

• Where are we in IoT deployment globally now? and future? by region?

•Where will the investment go?

•Who could be next Apple, Google, Alibaba, Tencent in the IoT space?

IoT market opportunity and forecast:

According to Cisco 2013 report, IoT market will be US$14.4 Trillion by 2022. There are 5 main drivers for IoT: Asset Utilization ($2.5T), Employee Productivity ($2.5T), Supply Chain & Logistics Efficiency ($2.7T), Customer Experience ($3.7T), and Innovation ($3T).

4 out of 18 industries make up >50% of the total value, those are Finance & Insurance, Retail & Trade, Information Services and Manufacturing. Three use cases create most value: Next Generation Workers, Smart Factories and Connected Marketing.


What the current status of IoT global deployment?

According to Evans Data Corp 2014 report, N. America (23% (currently develop) & 49% (plan to develop) IoT Project and Asia Pacific  (26% (currently develop and 60% (plan to develop)), are key growth region in IoT.

Among AP, India and China are most likely to target IoT development in their future plans. South American has lots of potential in IoT growth too.

Among Americas, US developer are the main force to drive IoT. IOT engagement is pretty comparable across whole US regions.

In EMEA, the Middle East has lot of potential (62% plan to develop IOT) even though Western Europe is more advance in IOT development - especially for France, UK and the western Europe  regions.

Where are  the Investments in IoT from now to 2020? which industries?

CAGR: 26%

Top is Manufacturing & Natural Resources

High growth in Retail & wholesale, and Transportation too.


To the business, the more interesting question is how much I can sell & profit? good example is how many IoT End Points can be sold, says in 2020?

Based on Gartner 2014 report,  answer is 25B devices installed by 2020.

Breakdown are:

• Consumer: 53%

• Generic Business: 21%

• Vertical Specific: 13%

• Automotive: 14%

Within Consumer: Home Automation & Information & Entertainment have top share in this segment

With Generic business: Energy and Automation get the most

Within Verticals: Utilities will be the winner

Within Automotive: Subsystems is clear leader


By 2017, IOT devices will exceed computing devices in terms of units sold

For Consumer devices, by 2018 the IOT devices will exceed computing devices including Traditional PC, Mobile phones &Ultramobile.

We are into a "NEW AGE” of every things is likely part of Internet inter-connected ecosystems.

In 2020, the IOT device shipment will be over 8B until with CAGB 38%

For Consumer, top installed IOT devices are:

• Smart TV

• Digital set-top box

• Indoor LED Lighting

• Healthcare monitor


For Business, top installed IOT devices are:

• Indoor LED Lighting

• Smart Electric Meters

• Connected field devices

• LED Street & area lamps


For Connected services, top installed base are:

• Connected Car

• Smart Electric Meters

• Remote Patient Monitoring


For Verticals, top installed devices for:

• Utilities

• Retails and Wholesales

• Manufacturing

• Government

One particular Verticals industry will mostly  impact each of us and our future generations.

Its’ GOVERNMENT - We give a specific terms in last few years:

It’s SMART CITY!!!

According to IDC 2015 report, Government segment has been growing stable with CAGR 10.6% from 2013 to 2017.

By 2017, 16% of total IOT market falls into Government segment. Among them, 29% is Smart City spending growing 11% each year from the base of $265B in 2014.

This is HUGE market!

You may ask WHY SMART CITY?

According to Smart City Council 2013 report, here are interesting and alarming data that we all should pay close attention to:

• 700M+ people will add to the Urban population in next 10 years

• 3B+ NEW resident move to CITY in middle of this century

• 40,000+ NEW cities will be needed worldwide

Those are HUGE numbers! HUGE PROBLEMS!!


It’s easy to tell the key reasons are:

• Increasing HIGH demand in the CITY

• Limited or Dropping Resources for the CITY

Many domains experts & technologist are trying to come up with solutions by leveraging latest and upcoming technologies like IOT in collective terms.

They call it  "Smart City".

One of definition for Smart City is a city uses ICT (Information, Communication & Technology) to enhance its Livability, Workability and Sustainability. It covers all key areas like Energy, Telecomm, Payments, Transport, Human Services, Water, Public Safety, Building, etc.



Where are we now in Smart City & who is doing that?

It’s GLOBAL now from Brazil’s RIO, South Europe, Quebec, Barcelona, USA, China…

Let us take examples in Europe like Austria, Spain, Portugal, United Kingdom… In last few years, their Smart City initiatives include Intelligent Transport Systems, Smart Grid, Smart Building, Smart Public works…etc.

According to Mckinsey Cityscape & Gigaom Research report, the top city priority are:

• Environment

• Economic Development

• Mobility

• System and Services

• Education

• Health

Sounds good. How does this translate into business opportunities?

Example:

China:

• US$667B Smart City opportunity in next few years

• 193 China Smart City is under-development in 2013

• 80% of China 2nd Tier Cities aims for Smart City

Huge opportunity for business

You may ask. It’s good but where can we find some quick wins. Here are 7 areas you can go after:

• Smart Transportation

• Smart Grids

• Smart Water Networks

• Smart Street Lights

• Public Safety

• Digital government services

• Smart Payments

Even for Startups, there are many opportunities in Smart City. The Urban Startup ecosystem consists of enabler from cities, investors & others.

Big Data

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One of most common challenge (and also opportunity) from IoT and Smart City is generating HUGE amount of data (call it BIG DATA), how to manage and make sense and use of those data for the real life.

Let us take US economy as example:

The ease of capturing big data’s value, and the magnitude of its potential, vary across sectors.

According to McKinsey & US Bureau of Labor Statistics, here are the key sectors:

Top (high value and ease to capture): Finance & insurance, Information

Middle: Real Estate, Healthcare providers, Wholesale trade

Less ease to capture but high value potential is Government!

According to Wikibon, the market size lost to US$50B.

Top sub-sectors are:

• Professional Services: $17.2B

• Apps & Analytics: $7.75B

• Compute: $7.6B

• Storage: $6.95B

Great, who are the key players and the latest landscape for big data market - See the graph.

How many companies you know?

There are many many new companies that you may never hear before just like A4 Data.  VCs & investors put in lot of money to grow this sector.

How about in China?

IOT plus Big Data will become a huge market & challenge. There will be 100ZB data from China home sensors by 2030

• each home will have 40-50 appliance and devices sensors & generate 200TB sensors data

•There will be 500 M Smart home

This will be a BIG Data challenge and also great opportunity.

Summary:

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In summary, there are huge market opportunities ahead of us in coming years.

• Global IoT will have $14.4T by 2022

• Smart City will have 16% of global IoT market by 2017; and  China alone will account for US$667B

• Big Data: Global market will be US$50B by 2017; China will generate 100ZB Big Data by 2030

China has big opportunity and also becomes the leading player in IoT, Smart City and Big Data markets.

Thank you for APCEO & China government again for this opportunity to speak at this conference.