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What Does IoT Really Mean?

by Greg Cargopoulos

What Does IoT Really Mean?

The tech industry is full of jargon, from RAM (random access memory) to SaaS (software-as-a-service). While many of these terms have concrete meanings, others have unclear or confusing definitions. And ambiguous definitions often lead to confusion and misunderstandings – and even unfair labeling as a "buzzword" rather than a descriptor.

Let's look at why the term "IoT" may be ambiguous and how it differs from similar terms.

IoT has become a popular term representing anything connected to the Internet – here’s why it’s more than just a buzzword.

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What is IoT?

IoT stands for "Internet of Things" and generally describes the connectedness of devices to the internet without human intervention. For example, internet-connected thermostats in homes or internet-connected sensors are both examples of IoT in action. The term is so broad that it could encompass millions of different devices.

The predecessor of IoT is M2M – or machine-to-machine communication. Before ubiquitous internet connectivity, these technologies enabled different machines to communicate with each other. For instance, Bluetooth or other technologies could enable two devices to "pair" with each other to share data in an industrial setting.

The rise in internet-connected devices stems from new 4G LTE and 5G cellular networks. With lower power requirements, manufacturers can install these cellular modems on much smaller machines, providing internet connectivity. At the same time, faster transaction speeds and lower latency opened the door to a wider variety of potential use cases.

IoT technologies help devices communicate with the broader internet rather than nearby machines. That way, devices can leverage everything from cloud storage to store massive amounts of data to machine learning services to translate the data into actionable insights. The result has been an explosion in new capabilities.

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IoT vs. Connected vs. Smart

Many people believe IoT devices are synonymous with "connected" or "smart" devices. While the terms may sound similar, there are some critical differences to keep in mind. For example, some devices could be smart without being connected, or connected without IoT. Understanding these differences can help improve communication.

Here are the differences between the terms:

  • Smart: "Smart" devices provide some automation for specific use cases, such as an appliance with an intuitive user interface. These devices may not require an internet connection to provide added functionality, distinguishing them from IoT devices.

  • Connected: "Connected" devices communicate using any connection, including Bluetooth, WiFi, cellular, or even Ethernet. Since they don't automatically default to the internet for connectivity, they don't necessarily fall under the IoT category.

  • Internet of Things: "IoT" devices communicate with a local network or the broader internet. As a result, they create more scalable, upgradeable, and future-proof "smart" and "connected" devices.

There are also subsets of each of these categories. For instance, Smart Home devices may connect appliances, thermostats, and other home devices to the Internet. And the Industrial Internet of Things (IIoT) represents IoT technologies in the workplace, enabling control over machines and other capabilities (discussed in greater detail below).

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Examples of IoT Technologies

The Internet of Things has grown into a multi-billion dollar industry with billions of connected devices over the past few years. According to Statista, the number of IoT devices will grow from about ten billion in 2021 to more than 25 billion by 2030. And consumer devices, such as smart home appliances or wearables, will account for about 60% of the market.

The number of IoT devices worldwide will continue to rapidly expand. Source: Statista

Some examples of IoT devices include:

  • Connected vehicles: Connected vehicles use IoT technologies to install remote software updates, communicate maintenance requirements, or even create caravans of cars to improve traffic flow and reduce congestion.

  • Wearables: Wearables use IoT technologies to connect data from smartwatches or other products to the internet for storage and analysis. For example, a smartwatch could send heart rate data to a cloud service that computes a resting heart rate.

  • Smart Home: Smart home technologies use IoT to do things like remotely control thermostats or look up recipes with a screen on the fridge door. These technologies are one of the fastest growing subsets of the IoT industry.

In addition to consumer use cases in the home, the Industrial Internet of Things (IIoT) has become invaluable in the workplace. Connecting machines to the internet enables predictive maintenance, remote production control, asset tracking, logistics management, and digital twins – or digital copies of physical objects.

Statista projects that the global IIoT market will grow from about $323 billion in 2022 to more than $1.1 trillion by 2028, driven by the rapid adoption of IoT-enabled artificial intelligence in the manufacturing sector and the standardization of IPv6, enabling a much larger number of devices to be connected to the Internet (IPv4 has proven difficult to scale).

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How IoT Might Evolve

IoT is a young term that continues to evolve. As cellular networks improve and more use cases come to market, there will be a growing ecosystem of sub-terms to describe different types of IoT devices. These terms will help improve communication by providing greater clarity, ultimately helping improve understanding for consumers and businesses.

In addition, IoT will continue to unlock new benefits across a growing number of industries. For example, the rise of Big Data and cloud computing is opening the door to new levels of analytics, such as wearables that can detect medical emergencies and alert first responders.

And finally, the networks that IoT devices connect to will also continue to evolve to improve scalability, speed, and latency. 5G networks are already unlocking far greater speeds and capacities with lower power requirements than 4G LTE, while IPv6 will support open architecture, advanced security, and higher reliability.

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The Bottom Line

IoT is a term that describes any devices connected to the internet that don't involve human intervention. These days, the phrase describes many different types of devices, including smart homes, connected vehicles, and wearables. As a result, it's worth diving into distinct subsets of the term to improve clarity and understanding.

If you're interested in developing IoT technologies, Intent is a leader in smart and connected devices, including wearables. Our team has over a decade of experience in delivering connected device projects to market, from conceptualization to building digital products that work with physical devices.

Contact us for a free consultation to discuss your project and how we might be able to help.


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