2016: A year of advancing Internet of things (IoT) applications

By Hemnabh Varia and Monika Mahto

It’s been 15 years since the term “Internet of things” was coined by Kevin Ashton, a technologist specializing in sensors and RFID.1 Since then, various applications of IoT have evolved in industries such as automotive, healthcare and consumer goods, among others. The various technological developments in the IoT space can be explained through the information value loop (IVL), which serves as a linchpin for evaluating these advancements, and linking them in order to create value for companies as well as customers. Refer to the paper, “The more things change: Value creation, value capture, and the Internet of Things” for detailed discussion of the value loop.

Below we discuss some of the key developments that emerged in 2016 within each of these technological categories.2

Source: Michael Raynor and Mark Cotteleer, “The more things change: value creation, value capture, and the Internet of things”, Deloitte University Press, July 27, 2015, https://dupress.deloitte.com/dup-us-en/deloitte-review/issue-17/value-creation-value-capture-internet-of-things.html, accessed November 28, 2016.

Sensors: Newer source of data creation

Among newer sources of creating data, advances in ingestible sensors and augmented and virtual reality tools made important strides this year.

Ingestible Sensors: Continuing miniaturization of sensors from millimeters (10-3 meters) to nanometers (10-9 meters) led to creation of a new buzzword: Internet of Nano things (IoNT) in 2016. A US-based pharmaceutical company is developing strains of probiotic bacteria. When ingested into the body, these strains act as nanosensors that recognize specific chemical targets, act as wireless nano-antennas and report the status back to a connected IoT system, informing the physicians, in order to treat rare metabolic disorders.3 In another example, artificial pancreas made headlines, thanks to its FDA approval in September 2016.4 The device closely mimics the functions of natural pancreas by not only monitoring the glucose levels in Type 1 diabetes patients, but also automatically administering the appropriate amount of insulin required for the individual.

Augmented Reality/ Virtual Reality (AR/VR): Advancements in AR/VR were fueled by 76 deals in the first half of 2016 totaling an investment of $1.3 billion, 85 percent higher than annual funding in the year prior.5 One of the practical applications of the AR segment is the introduction of bicycle/ motorcycle helmets earlier this year.6 The helmets provide riders with a 360-degree view of the road and relay environmental and health indicators on the helmet screen to avoid potential collisions and track fitness data.7

Likewise, VR is no longer limited to providing enhanced gaming experiences. VR made a steady entry in the medical field with leading US-based hospitals using surgical planner VR tools to enable surgeons to virtually perform complex neurosurgery procedures and avoid potential complications.8

Networks: Newer and faster data communication

Newer sources of data and growing databases are exerting pressure on scale and speed of existing network infrastructures. Various network developments in 2016 are likely to support and expand the IoT ecosystem going forward.

5G: Touted as the next generation of network technologies, 5G has found support among both government entities as well as private companies. In mid-2016, a US government body associated with the communications division announced its plan to make 11 gigahertz of spectrum available for 5G, boosting wireless speeds 10-fold for purposes such as remote surgery and factory robotics.9 Also, a Turkey-based telecom player is investing recently invested in testing 5G and IoT technologies in Turkey for tracking, metering, smart cities, and smart home applications.10

Bluetooth 5: In yet another development, The Bluetooth Special Interest Group announced the release of Bluetooth 5. Compared to Bluetooth Classic, Bluetooth 5 is expected to possess quadruple the range and double the speed of low energy connections, a key development for transmission between smaller IoT devices.11

The development of networks technologies such as 5G and Bluetooth is expected to improve bandwidth to a great extent, so that more data can be transmitted at a faster pace, making the concept of the IoT ecosystem scalable and versatile.

Standards: Improved data aggregation through new technical and regulatory standards

Introduction of IoT has led to the increase in unstructured data collected from images, videos, emails, social media activities, etc. In order to aggregate this unstructured data, developments in IoT standards – both technical and regulatory – were seen this year.

Technical Standards: One among the many IoT platforms, IoTivity is an open source software framework sponsored by the Open Interconnect Consortium. The platform’s latest release in mid-2016 covers various functions such as device discovery, communication, and data exchange, in multiple domains, including home automation, automotive, enterprise, and health care. Various networks such as Bluetooth, Wi-Fi, etc. are supported by this platform, and it is expected to provide seamless device-to-device connectivity between billions of IoT devices likely to emerge in the near future.11

Regulatory Standards: New cybersecurity requirements are being drafted in Europe in order to increase the security around IoT devices such as security cameras, routers, etc.13 In May 2016, the Commerce Committee in the U.S. Senate passed the “Developing Innovation and Growing the Internet of Things (DIGIT)” Act, which establishes a working group for the development and protection of the IoT ecosystem.14 Likewise, Telecom Regulatory Authority of India (TRAI) is developing a framework to govern machine-to-machine (M2M) communications.15

Augmented Intelligence: Artificial getting real by the day

The AI space, which collects, analyzes and infers various forms of data, is on track for the largest number of M&A deals than the previous years, with H1, 2016 registering 24 deals, and the full year estimated to register 48 deals, 33 percent higher than in 2015.16

Open AI Ecosystem: Popular personal intelligent assistants available in the market can typically perform only a limited set of useful things. Companies are moving a step ahead, by developing open AI ecosystems that learn from the environment, and have the ability to closely function like human assistants. In one example, a US-based technology startup introduced an AI system that searches for flights that suit customers’ preferences based on their previous searches and flight booking patterns.17

Conversational Interfaces: Most AI systems are now allowing customers to literally “talk” to their devices. A China-based search engine is using its speech technology for implementing conversational interfaces, making the use of voice interfaces for smartphones possible.18 A range of activities such as banking and insurance are now possible to execute even in noisy environments via conversational interfaces. For example, in October 2016, a leading US-based financial services company announced its plans to launch AI bots that will allow consumers to transact and manage finances through conversational interfaces.19

Augmented Behavior: Smarter robots and advanced material properties

In order to reduce human intervention with automated processes, technologies are being developed to make actions based on augmented intelligence more reliable and optimized.

Self-learning robots: Advancements in augmented behavior include tech companies’ efforts to enable robots to teach each other new skills. This can be achieved by recording and uploading actions performed by robots onto a cloud, and allowing other robots to analyze that data and perform similar functions. In one example of the ‘grasping robotic arm’, the robot was able to observe its own gripper, learn and correct its own actions for grasping an object or opening a door and then teach other robots to perform the same functions.20 The robotics division of a leading online retailer has designed robots, which can learn, self-adjust, and crowdsource data from other pods to troubleshoot issues, in order to move objects within racks in their warehouse.21

Advanced Materials: A few materials that display attributes of “living” materials were further developed in 2016. Attributes related to self-assembly and self-healing, help reduce human intervention and advance augmented behavior. Self-assembling materials, popularly known as ‘4D Materials’ are being developed, which can recalibrate their shape and properties when exposed to external stimuli such as heat and light, were put to various applications such as camouflage suits for the military and medical implants that change shape inside the body.22 Furthermore, recent developments in advanced functional materials includes a self-healing electronic material, developed at the University of Southern California School of Engineering, which can repair and restore its functionality even after multiple breaks via bonding of hydrogen cells, making bendable electronics a technology that can be commercialized.23

2016 was an exciting year with new IoT applications coming through to fruition. Advancements in each of the stages of the value loop: sensors, networks, standards, and augmented intelligence and behavior are likely to have implications on a number of industries, and in some cases, could completely alter conventional methods and processes. IoT technologies are evolving by each passing day and we encourage you to check out Deloitte’s ongoing research at https://dupress.deloitte.com/dup-us-en/focus/internet-of-things.html.


1 Michael Raynor and Mark Cotteleer, “The more things change: value creation, value capture, and the Internet of things”, Deloitte University Press, July 27, 2015, https://dupress.deloitte.com/dup-us-en/deloitte-review/issue-17/value-creation-value-capture-internet-of-things.html, accessed November 28, 2016.
2 Jonathan Holdowsky, Monica Mahto, Michael Raynor, Mark Cotteleer, “Inside the internet of things: A primer on the technologies building the IoT”, Deloitte University Press, August 21, 2015, https://dupress.deloitte.com/dup-us-en/focus/internet-of-things/iot-primer-iot-technologies-applications.html?icid=interactive:not:aug15, accessed November 28, 2016.
3 World Economic Forum’s Meta-Council on Emerging Technologies, “Top 10 Emerging Technologies of 2016”, World Economic Forum, June 2016, http://www3.weforum.org/docs/GAC16_Top10_Emerging_Technologies_2016_report.pdf, accessed November 24, 2016.
4 Christine Blank, “First “artificial pancreas” for diabetes approved, plus 2 more FDA actions”, Formulary Journal,
September 29, 2016, http://formularyjournal.modernmedicine.com/formulary-journal/news/first-artificial-pancreas-diabetes-approved-plus-2-more-fda-actions, accessed November 24, 2016.
5 CB Insights, “AR/VR Funding In 2016 Already Sees 85 percent Growth On 2015”, July 7, 2016, https://www.cbinsights.com/blog/augmented-virtual-reality-funding-trends-q2-2016/, accessed November 24, 2016.
6 Edd Gent, “Augmented-Reality Helmet Could Give Cyclists Extra Eyes on the Road”, Live Science, October 13, 2016, http://www.livescience.com/56471-augmented-reality-optic-bike-helmet.html, accessed November 24, 2016.
7 John Gaudiosi, “BMW Just Debuted a Sci-Fi Motorcycle Helmet”, Fortune, January 7, 2016, http://fortune.com/2016/01/07/bmw-motorcycle-helmet-augmented-reality/, accessed November 24, 2016.
8 Ampronix, “Virtual Reality Gains in Surgical and Diagnostic Applications”, Medical Design Technology, June 21, 2016, https://www.mdtmag.com/article/2016/06/virtual-reality-gains-surgical-and-diagnostic-applications, accessed November 24, 2016.
9 Mark, Lowenstein, “Here comes 5G — but first, a reality check”, Recode, July 25, 2016, http://www.recode.net/2016/7/25/12266072/5g-wireless-broadband-spectrum-reality-check-fcc-internet-of-things, accessed November 24, 2016; GSMA Intelligence, “Understanding 5G: Perspectives on future technological advancements in mobile”, December 2014, https://www.gsmaintelligence.com/research/?file=141208-5g.pdf&download , accessed November 28, 2016.
10 Nokia, “Nokia and Türk Telekom collaborate to advance development of 5G and Internet of Things technologies”, Nokia, April 15, 2016, http://www.nokia.com/en_int/news/releases/2016/04/15/nokia-and-turk-telekom-collaborate-to-advance-development-of-5g-and-internet-of-things-technologies, accessed November 24, 2016.
11 Bluetooth, “Bluetooth® 5 Quadruples Range, Doubles Speed, Increases Data Broadcasting Capacity by 800 percent”, June 16, 2016, https://www.bluetooth.com/news/pressreleases/2016/06/16/-bluetooth5-quadruples-rangedoubles-speedincreases-data-broadcasting-capacity-by-800, accessed November 24, 2016.
12 IoTivity, https://www.iotivity.org/, accessed November 23, 2016.
13 Matthew Broersma, “EU Pushes IoT Security Regulations”, Silicon, October 10, 2016, http://www.silicon.co.uk/security/european-commission-push-iot-security-regulations-198826, accessed November 28, 2016.
14 Kevin Farnham, “DIGIT Act Defines Framework for U.S. Internet of Things Policy”, InfoQ, May 4, 2016, https://www.infoq.com/news/2016/05/digit-act-iot-policy-framework, accessed November 28, 2016.
15 Press Trust of India, “Trai to initiate consultation on IoT, M2M communication soon”, Business Standard, September 18, 2016, http://www.business-standard.com/article/economy-policy/trai-to-initiate-consultation-on-iot-m2m-communication-soon-116091800114_1.html, accessed November 28, 2016.
16 Steven Loeb, “M&A in the AI space is on track for record year”, Vator, June 27, 2016, http://vator.tv/news/2016-06-27-m-a-in-the-ai-space-is-on-track-for-record-year, accessed November 28, 2016. Note: Absolute value of M&A deals in the AI space were not available.
17 World Economic Forum’s Meta-Council on Emerging Technologies, “Top 10 Emerging Technologies of 2016”, World Economic Forum, June 2016, http://www3.weforum.org/docs/GAC16_Top10_Emerging_Technologies_2016_report.pdf, accessed November 24, 2016.
18 Will Knight, “Powerful speech technology from China’s leading Internet company makes it much easier to use a smartphone”, MIT Technology Review, https://www.technologyreview.com/s/600766/10-breakthrough-technologies-2016-conversational-interfaces/, accessed November 24, 2016.
19 Mastercard, “Mastercard Makes Commerce More Conversational With Launch of Chatbots for Banks and Merchants”, October 25, 2016, http://newsroom.mastercard.com/press-releases/mastercard-makes-commerce-more-conversational-with-launch-of-chatbots-for-banks-and-merchants/, accessed November 24, 2016.
20 Liam Tung, “Google’s next big step for AI: Getting robots to teach each other new skills”, ZD Net, October 4, 2016, http://www.zdnet.com/article/googles-next-big-step-for-ai-getting-robots-to-teach-each-other-new-skills/, accessed November 24, 2016.
21 Alan Taliaferro, Charles-Andre Guenette, Ankit Agarwal, Mathilde Pochon, “Industry 4.0 and Distribution Centers”, September 12, 2016, https://dupress.deloitte.com/dup-us-en/focus/industry-4-0/warehousing-distributed-center-operations.html
22 William Wassmer, “4D Printing: The Smart Materials of The Future”, Azo Materials, October 2, 2015, http://www.azom.com/article.aspx?ArticleID=12387, accessed November 24, 2016.
23 Ashleen Knutsen, “USC Viterbi Professor Qiming Wang uses his novel 3-D printing technique to design a flexible, electronically conductive material”, USC Viterbi, October 12, 2016, http://viterbi.usc.edu/news/news/2016/new-material-could-revolutionize-flexible-electronics.htm, accessed November 24, 2016
.

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