Buying Trends for IoT Circuits and Sensors
by Bridget McCrea on GlobalPurchasing.com
Did you know that as the Internet of Things continues to evolve, buyers are seeing lower pricing on the sensors that go into their companies’ IoT devices and equipment?
Envisioning an advanced level of network connectivity where everyday objects like refrigerators, toasters, and wearable devices would send, receive, and share data among one another, inventors of the Internet of Things (IoT) are beginning to see their visions become reality. And while the notion of a toaster “talking” to a refrigerator may still be in development, IoT applications have already surfaced on both the industrial and consumer sides of the electronics market.
Research firm Gartner forecasts that 6.4 billion connected “things” will be in use worldwide this year, up 30% from 2015, and will reach 20.8 billion by 2020. In 2016, 5.5 million new things will get connected every day. Services are dominated by the professional category (in which businesses contract with external providers in order to design, install, and operate IoT systems), according to Gartner, but connectivity services (through communications service providers) and consumer services will grow at a faster pace.
The IoT Supply Chain
For buyers, Rob Lineback, senior market research analyst at IC Insights in Scottsdale, Ariz. says the IoT’s evolution presents some interesting challenges. When procuring electronic components, for example, he says buyers should have an understanding of whether the end product is heavily dependent on SoC design. If it is, he says issues like getting the components on time and within a reasonable price range could come into play.
“From a supply-chain point of view, there’s always going to be concern about availability,” says Lineback. “If you have a new IoT device that takes off like gangbusters, for example, you have to make sure you can get the parts in the door and your products shipped out on time.”
On the sensor side of the equation, Lineback says ongoing price erosion in the marketplace will probably keep costs down for the near future. “Price erosion for sensors is at a level we’ve never seen before,” he says. “That’s partly because everyone is racing to get the price of a [sensor] down to a dollar or less. As a result, it’s difficult for suppliers to attain an acceptable profit margin.”
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