SemiCon 2016 and Internet of Things (IoT)

EquationIt is interesting to note that the constant IoT theme at SemiCon 2016 and the impact on the semiconductor market and the economy overall. But what these pundits tend to ignore that to justify IoT, that is just one element that takes the advantage of this incipient technology.  In other words, the implementation will not occur overnight.

IoT is not a “new, new” thing. Over a decade ago, I saw a presentation by Dr. Vint Cerf, a co-originator of the TCP/IP protocol, where he suggested that all household objects will be labeled with a TCP/IP address to identify, monitor, and control those objects. He detailed that even contents within a refrigerator can be a source of digital information.

Now, we see a plethora of reports indicating an explosion of IoT products, mostly sensors. Some see this as the savior to the semiconductor market.  In the report below, one notices the prognostication of +7% compounded growth in various gas sensors. On the other hand, at the SemiCon  2016, Ed Korcynzski, Sr. Technical Editor of Solid State Technology, referring to Gartner study, is not so bullish on the IoT markets.

Gas sensors forecastThe key problem is the IoT is based on very fragmented markets of sensor manufacturing.  There are many suppliers dividing up that marketing supply chain for the various applications. And the end-users are still searching for products for which they can apply these so-called smart technologies.

Smartphones have been that end product so far but even that market is getting saturated. And there are so many sensors that can be inserted into the phones without draining more and more the precious battery power.  Also, with the zero sum economics applied to a very mature market, the few smart phone leaders are competing for small percent of market share, not different from the Coca Cola and Pepsi market dominance and battles.

What Dr. Cerf envisioned were applications relegated to homes, not to smartphones. And these products still have some kinks and some require greater marketing skills for final adoption in the home. Sensors don’t make the products – well designed consumer products do. And sensors are one of several components for the end product. Besides the sensor, one has to identify the means to communicate to a central processing device, either wirelessly or via a plug. Then that information has to be processed. Then, a friendly GUI provides the actionable data. And if one sends this data to the cloud, that information has to be collected, organized, and analyzed. At one Semicon 2016 session on banking, the emphasis became the big data collection in the cloud and the analytics that will dominate the sensor market, not the sensors.

Once a company can integrate all of these features, then you can see more adoption in this digital marketplace. The hurdles are combining various skill sets – engineering, consumer marketing, telecommunications, data gathering and analytics.  But I don’t foresee a sensor manufacturer advertising at Super Bowl events. Or a telecom company describing its bandwidth of data. I see that the supply chain will be dominated by manufacturers closer to consumers. And with certain consumer products, I can see the growth for sensors and other IoT applications.


About Juan Ramón Zarco, SVVGP 胡安•雷蒙•扎尔科

Juan Ramon Zarco, 胡安•雷蒙•扎尔科, Silicon Valley Ventures Growth Partners llp, Hygieia Healthcare Technologies Company, AllRest Technologies LLC, Crimson Growth Partners LLP,, is an experienced as CxO, General Counsel and Secretary to public and private companies with global operations. Established track record of producing practical, revenue-focused solutions. As Counselor and Secretary, demonstrating vision, integrity, and sound business judgment, to CxOs. Managed complex, strategic transactions, M&A, contracts support, PE Financing, IPO, SEC compliance, Corporate/HR governance, IP licensing, Budgeting, Staff, outside counsel management, International market access strategies, Domestic & foreign government relations and advocacy. Creative in designing and implementing market access strategies. Practices law beyond conventional model with low-overhead and project-based fees. Effective at managing departments, formulating marketing strategies, balancing budgets, and implementing cost-saving measures. Extensive in-house and private practice experience, advising clients on commercial, corporate, international business, and technology law and policy.; For Sprint, he managed iDen international development in Southeast Asia, Middle East, and Africa, and contractual issues with Verizon. In Private Equity, he worked with Pegasus in vetting international investment deals and interim President for portfolio companies, such as Data Foundation, a data storage company, handling marketing, strategy, fund raising, and accounting. Before Pegasus, Mr. Zarco, as CLO and V.P. of Corporate Development, played a principal role in the structuring, international expansions for 2 telecom companies, U.S. Cable Group and Viatel, Inc. in financing and M&A deals exceeding $200 million. Mr. Zarco earned a J.D. from NYU Law School, M.B.A. from Cornell, and B.A. from Williams College; is fluent in Spanish, Portuguese, French, and German, with working knowledge of Russian, Arabic and Japanese.
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