Be Smart and Embrace the Delta

March 1, 2015

By: Michael Widlicki

The internet of things refers to smart, connected products. Products are not smart only because they have internet connectivity, but instead because they have capabilities that are now being opened to this next generation of products. Smart products are a combination of physical, “smart” and connected. Each component amplifies the capabilities of the other two synergistically. Taking the example of the car, the physical is made up of the body, tires, and steering wheel. The smart comprises of the sensor, processor, controls, and touch screen displays. Finally connectivity relates to antennae and any wire or wireless enabling device which allows for: one-to-one, one-to-many, many-to-many connectivity. A Tesla car for example can repair software issues autonomously and call for valet to pick up and drop off the car at a Tesla facility when more serious issues arise.

These smart products allow for Monitoring, Control, Optimization and Autonomy. Medtronic’s digital blood-glucose meter uses sensors to monitor glucose levels in a patient. Due to the sensor being placed under the skin the meter is able to alert clinicians 30 minutes prior to reaching critical blood glucose levels, allowing adequate time for adjustments. Philips has a light bulb that allows users to control the level of brightness, even allowing for intruder alerts. Smart wind turbines can adjust and optimize their blades in real time to maximize energy capture. The turbines not only take win speed and direction into account but also the effects on adjacent turbines. An iRobot Roomba is able to “learn” your floor plan autonomously and clean it accordingly. This removes the need for people to perform such monotonous tasks. More importantly autonomy is slowly removing the human element from dangerous job like deep underground mining. In the near future we will only need operators who monitor mining equipment performance.

The market place is being exposed to these new smart products. There will have to be a feeling out process between supply and demand until an equilibrium is reached. This equilibrium will only last until the next generation of products enters the market and once again causes a great disturbance in the equilibrium. Companies that have embraced the change have reaped the rewards. Tesla Motors Inc. (TSLA:NASDAQ) five years ago was trading at approximately USD$20.00. Elon Musk and the Tesla have established themselves as household names because of embracing the “smart” product trend. Tesla Motors Inc. did not have to look to the government for a financial bailout unlike some of their dated automobile counterparts. The consumer market is not static or stagnant and those that embrace the delta will reap the rewards.

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