Qualcomm to Buy NXP Semiconductors in USD$47 Billion Dea
General Motors, IBM partner to deploy OnStar Go for in-car payments era
Chinese IoT device manufacturer recalls products amidst mass DDoS attacks
Alibaba and Gemalto work hand-in-hand to secure China’s IoT market
Sources: Bloomberg; The Paypers; SC Media; Gemalto
Point of View
A recent report, published September 2016 suggests that the IoT device market is “expected to grow from USD 130.33 Billion in 2015 to USD 883.55 Billion by 2022, at a CAGR of 32.4% between 2016 and 2022”. The impact will cut across most sectors from consumer devices and automobiles, to healthcare and building automation. On the back of this Qualcomm have taken over NXP in an all cash deal and state that automotive and IoT are key for them, as they see the future as connectivity of devices rather than connectivity of people. They state that situation is analogous to the mobile phone at the beginning of the century.
Manufacturers have been looking at the concept of the connected car and how to generate revenue by exploiting the capability of the technology. For example, General Motors have set up OnStar to provide subscription based communications to the car and partnering with IBM to create OnStar Go, which provides personalised content into the car. MasterCard is one of the first companies to join the platform, enabling in car payments. It is relatively early in the product life-cycle for connected car personalised content and payment, but early indications are that this will be a significant market.
While the outlook suggests significant growth, security remains a real concern, especially for low value IoT components. October 2016 has seen large-scale cyber attacks initiated by a “botnet of hacked Internet of Things devices”. While costly for the companies on the receiving end of the DDoS attack, the lack of security represents an opportunity for organisations to provide trust services. Gemalto has announced that it is “collaborating with the Alibaba Group” to provide security for YunOS its cloud based IoT operating system.
It is difficult to ignore the level of investment made into key technologies supporting auto and IoT, especially from the leading mobile processor manufacturer. For payments, the characteristics of device technologies are likely to be similar. For example, requiring the ability to generate a payment transaction with another device without user input or aggregate transactions for post-pay settlement. As these sectors continue to develop and start to mature, now seems the right time to explore and learn, perhaps targeting a specific niche (such as the user experience for invisible payments) or exploring where the opportunities are for partnerships.
Although there is limited direct evidence to date, the persistent lack of security for IoT suggests that it is likely regulators will become involved in the deployment of product in the near future.