Welcome to the “Internet of Things”

We’re out of milk. Again.

It’s a constant source of friction in our house.

Milk is the beverage of choice for my wife and kids — I’m pretty sure they could drink it by the pitcher.

As for me, I appreciate a cold glass on occasion, but I generally prefer to save most of the carton for cereal and cooking.

Just buy two gallons instead of one? Tried that. They fill their glasses with twice as much, leaving barely a drop for the mashed potatoes I planned on making for dinner.

We go through a lot of cheese as well.

At this point, it might be cost-effective to just buy a cow and become a dairy farmer.

But I digress.

Samsung probably had another family in mind when it developed a new instructional video for one of its latest smart refrigerators. Among other snazzy features, you can swipe up (or was it down?) inside a special app to send a command that “wakes up” your fridge and transmits live video of its contents… to wherever you might be.

So if you’re at the supermarket and are wondering how much milk is left, a few clicks can show you in vivid detail — right down to the expiration date — whether you should pick up another gallon. I had to chuckle. The answer is always yes. However, this same camera feature might prevent me from accidentally buying a third bottle of ketchup.

But in all seriousness, the feature-rich touchscreen display on Samsung’s Family Hub line of smart refrigerators is astounding. Mom can push a few buttons on the way to work for local news, weather, and traffic updates. Dad can leave chore reminders on the kids’ calendar and access recipes to whip up some chicken cacciatore for dinner.

This thing can stream music from Pandora and show you who is ringing the doorbell — while reminding Alexa to add marinara sauce to the next Instacart grocery delivery.

Jeez, I remember when refrigerators with water and ice dispensers were fancy.

But that’s the world we live in today. A world in which not just computers and phones are connected to the internet (and communicating with each other), but so are countless billions of ordinary objects. You can probably guess where I’m going with all of this.

Yes, the Internet of Things (IoT).

Once the realm of science fiction, this advance is spawning all kinds of futuristic innovations. Many household products have graduated from wow-inducing demonstrations at the Consumer Electronics Show straight to your own kitchen.

Homeowners are captivated. But with a market size that has surpassed $500 billion in annual revenues (and growing), this phenomenon should be even more exciting to investors.

Welcome to the “Internet of Things”

If talking to kitchen appliances sounds a bit like something from The Jetsons, then you might be a Baby Boomer or a Gen-Xer like me. But younger generations are perfectly comfortable interfacing with machines. And this radical transformation extends far beyond condiments.

Forget to start the washing machine before you leave for church? No problem; you can start a load remotely with a simple text message. Or use an app to schedule a drying cycle that begins promptly at 5 p.m.

Models from Whirlpool (NYSE: WHR), LG, and other manufacturers will even message you back when everything is done. And if you’re at home, these new appliances respond to voice commands.

You’ve probably seen those smart-home commercials where travelers on vacation can lower their garage door from across the country. They can also raise the thermostat. Or turn on the bedroom lights. Or water the lawn. Or feed the dog. Or vacuum the living room. Or unlock the front door for a repairman.

All in the palm of their hand.

While installation costs for some of the higher-end systems can be a deterrent, entry-level networking products — such as Apple (AAPL) Home or Google Nest — are relatively affordable.

Aside from convenience, this routine automation offers many benefits. Smart homes are considered to be more energy-efficient, while enhanced security sensors, smoke detectors, and surveillance cameras help owners sleep better at night.

Plus, smart stoves won’t overbake your cookies.

From Amazon (NSDQ: AMZN) to IBM (NYSE: IBM), dozens of deep-pocketed tech companies have a vested interest in this space and are allocating R&D (research and development) dollars accordingly.

Meanwhile, you’ll notice that Best Buy (NYSE: BBY) and other retailers are devoting more floor space to the category. And for good reason. According to McKinsey, global spending on smart home devices is projected to double from $85 billion in 2020 to $170 billion in 2025.

Yet that’s still just one facet of the IoT. There are arguably even bigger advances taking place outside the home.

When Kevin Ashton, a supply chain analyst for Procter & Gamble (NYSE: PG) first coined the term “Internet of Things” in 1999, he wasn’t thinking about toasters. He was envisioning a blanket of sensors that pick up physical information and convert it to digital data.

The applications of this groundbreaking integration are almost endless, from detecting manufacturing outages to boosting agricultural yields.

If you’ve ever used Google Maps or some other GPS/navigation system, then you’ve already seen the benefits firsthand. These services can instantaneously spot traffic tie-ups, re-routing drivers to alternate roads to reach their destinations more quickly.

While we’re on the subject, it’s hard not to notice that the latest cars and trucks coming off the assembly lines have become computers on wheels. Arrays of sensors and radar can automatically dim headlights for oncoming traffic. This same technology can provide lane change support, automatically brake the car to avoid a crash, and even parallel park.

We’re now sharing the road with fully autonomous vehicles. And if Samsung and Whirlpool can make a kitchen smart, what’s to stop transportation engineers from replicating this process on a much larger scale?

That will require innumerable connected devices to monitor weather, traffic patterns, pedestrian crossings, freeway exits, and stoplights… and to communicate seamlessly with vehicles.

Have you ever pulled up to a stoplight and it quickly turned green? That could be lucky timing. Or you might thank sensing technology that detects the presence (or lack) of surrounding vehicles. These sophisticated monitoring systems can modify signals to optimize traffic flow and reduce congestion.

The push toward fully intelligent “smart cities” is underway.

Meanwhile, at 35,000 feet, a network of wireless sensors and other synched devices inside jet engines and along the fuselage will relay reams of real-time flight data that can be used to optimize fuel efficiency, improve travel times, reduce maintenance expenses, and possibly even save lives by detecting anomalies before they turn dangerous.

In the past, this mountain of data was stored somewhere and analyzed weeks or months later. Manually, it would take a lifetime. The difference is that internet connectivity (and much more computing horsepower) allows for this data to be gathered, transmitted, analyzed, and acted on almost instantly.

Keep in mind, that even a tiny 1% drop in fuel consumption can add tens of millions of dollars to the bottom line of most airlines.

Grocery stores are using this transformative technology to dim cooler illumination when there are no shoppers in a particular aisle. Farmers can install sensors to track pest populations and monitor soil moisture levels.

The Internet of Things might even save your life one day.

There is an abundance of smartwatches and fitness trackers on the market that can monitor glucose levels, measure blood oxygen, perform an electrocardiogram (EKG), and provide other such medical feedback. These biosensors can quickly detect heart arrhythmias and other anomalies, alerting the wearer and even healthcare professionals if need be.

According to the Pew Research Center, one in five people now wears one of these connected devices. They are especially helpful for patients trying to manage diabetes and other chronic conditions.

A Growing, Connected Market

Toys. Lightbulbs. Water meters. Vehicle infotainment systems. There are even smart-sensing mattresses. Many everyday things are connected to the internet these days.

While visionaries have long had this dream, it took a sharp decline in sensor costs and faster connectivity speeds to make the Internet of Things a reality.

In some cases, this basic hardware can be installed for as little as 10 cents per unit. In fact, RFID tags can now be slapped on store merchandise nearly as easily as a barcode, allowing for wireless data transmission that negates the need for cashiers and checkout aisles.

Just toss a few items in the basket linked to an electronic payment method and walk out the door. Amazon has already debuted one of these “walk out” stores. Whether this is a step forward or backward may depend upon your age.

But either way, it’s happening.

As you might imagine, the world was already producing petabytes of information each day even before everything was interconnected. But now we have the raw computing power to make sense of it all.

Everybody has their own definition of this revolution, but my favorite belongs to Intel (NSDQ: INTC):

The Internet of Things involves physical devices (such as cameras, sensors, and other everyday technologies) that collect and share data about their use and environment over a communications network, combined with powerful computing capabilities to turn data into insights.

There have been other challenges to overcome, such as getting all of these devices to speak the same programming language (Bluetooth, WiFi, WAN, Zigbee, Matter, etc.).

Many of these applications also needed the rollout of 5G internet. We also had to find a foolproof system to identify and locate all of these unique objects. That last one was effectively solved by the adoption of Internet Protocol version 6 (IPv6), which according to ZDNet added enough digital addresses for every device in the galaxy.

From small home appliances to HVAC systems in massive airports, the Internet of Things continues to grow and evolve. According to IoT Analytics, there are roughly 17 billion global devices (or “endpoints”) connected to the internet. That number is projected to soar to 30 billion by 2027. Some sources say 40 billion… or more.

They’re all just educated guesses. A former director of internet technology at IBM compared IoT forecasts to trying to calculate the potential for plastics in the 1940s.

However, analysts are unanimous on one thing: This market will get much, much bigger. Spending will follow suit.

Fortune Business Insights sees revenues climbing from $662 billion last year to $3.3 trillion by 2030 — a sizzling compound annual growth rate (CAGR) of 26%.

Needless to say, hundreds of businesses will be jockeying for position and trying to grab a piece.

Editor’s Note: The gap between traditional and digital markets is narrowing, as Bitcoin exchange-traded funds (ETFs) report massive inflows of new capital.

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