Microchips will 'change Earth'
Billions of ordinary things — from farm cows and factory gear to pollution monitors and prescription-drug bottles — are being outfitted with microchips and linked by online networks in a technological transformation that some experts predict will be as profound as the Industrial Revolution.
The payoff of this so-called “Internet of Things” could be staggering, especially for tech companies, which already are jockeying to cash in on the trend. Research firm IDC predicts this shift will generate nearly $9 trillion in annual sales by 2020. By comparison, the total annual sales of the San Francisco Bay Area's 150 biggest technology companies in 2012 was $677 billion.
“This will be potentially the biggest business opportunity in the history of people,” said Janusz Bryzek, a vice president at San Jose, Calif.-based Fairchild Semiconductor International Inc., who helped organize a gathering of international experts at Stanford in October to discuss the subject. “We are changing the Earth.”
Indeed, the implications could be extraordinary and wide-ranging, affecting almost everyone on the planet in ways both big and small.
By outfitting the globe with billions of connected gadgets, experts foresee a world in which:
• More elderly people survive once-life-threatening accidents, since doctors and emergency responders will be alerted the moment their patients fall;
• Fewer planes will crash, because every part on every aircraft will be electronically monitored so they can be quickly replaced at the slightest sign of failure;
• And wines will get better, as vineyard operators will know precisely when their grapes have the perfect sugar concentrations for picking.
All this promises a huge windfall for tech corporations, especially those in three key areas.
Because microchips are essential for smart gadgets, for example, a number of companies that make the circuits are expected to profit enormously.
In November, Santa Clara, Calif., chipmaker Intel Corp. formed an Internet of Things Solutions Group to focus on the growing market. Other chipmakers considered well positioned to take advantage of the trend are Atmel Corp. and Linear Technology Corp..
At a San Jose, Calif., conference in October to discuss those semiconductor opportunities, Jim Tully of research firm Gartner told attendees, “We're going to see massive growth all over the place.”
Another key area is computer networking gear, such as the routers, switches and other equipment sold by giant Cisco Systems Inc. The San Jose corporation recently created an Internet of Things unit similar to Intel's, and the new group's managing director, Joseph Bradley, termed the booming business “immensely important to us.”
Software companies also are expected to benefit, because their coded instructions are essential for telling computerized gadgets what to do and making sense of the vast trove of data they'll generate.
Insurance companies, for instance, are using data gathered by automobile sensors to identify high-risk motorists, based on their driving habits, and adjust their rates accordingly.