The Relationship of the IoT and the Smartphone

Jasper Venema
Student number: 6137822
Coordinator: Professor G.T. Vinig
Course: International Entrepreneurship
Date: 14-12-2014

Jasper Venema
Student number: 6137822
Coordinator: Professor G.T. Vinig
Course: International Entrepreneurship
Date: 14-12-2014

This paper focuses on the emergence of the Internet of Things (IoT) and the evolution of the smartphone. We have seen big changes in the mobile industry with as headliner the great increase in accessibility to mobile broadband internet. The smartphone is becoming more than just a phone; the next big thing in the industry might be our surroundings.

This paper focuses on the emergence of the Internet of Things (IoT) and the evolution of the smartphone. We have seen big changes in the mobile industry with as headliner the great increase in accessibility to mobile broadband internet. The smartphone is becoming more than just a phone; the next big thing in the industry might be our surroundings.

Contents Introduction 2 Internet of Things 3 The smartphone 5 Conclusion and discussion 8 Reflection 9 References 10

Introduction

A term that is often crossing our path at the moment is the Internet of Things. Although the term “Internet of Things” was first coined in 1999 by Kevin Ashton, its emergence only recently began to take off. It is supposed to be a new, third wave of disrupting technology throughout the internet´s history (Witchalls, 2013; Gubbi,Buyya, Marusic, Palaniswami, 2013). As the internet emerged, the first big wave began to rise: we have all experienced the vast integration of personal computing in our daily lifes. Also, the second wave is nowadays ready to become of age: mobile internet and the connected devices. The era of easy accessibility to mobile broadband and widespread Wi-Fi access points disrupted the way we communicate and our phones defined real mobile computing (Witchalls, 2013).
By the start of 2015, an estimated 2 billion smartphone users will be roaming the world (Brown, Zeitman, Smittenaar, Adams, McNab, 2014). Major innovations in the smartphone industry opened up many possibilities for the IoT (Goldman Sachs, 2014). The researchers at Goldman Sachs (2014) and Mattern et al. (2010) argue that the smartphone is the consumers’ gateway to the Internet of Things. The device is becoming the remote, the hub and really the center of the way we operate and communicate with things in our surrounding that are connected with it.

But what exactly is the Internet of Things? IoT in the literal meaning of the words can be everything. All that there is can be connected in a certain way and in different levels. As Fleisch (2010) argues, we will only adopt devices that can actively communicate with the internet in our view of IoT for pragmatic reasons.

Because of the writers' personal experience as a sales associate at a big Dutch telecom provider, the author is provided with insight in the trends that are flowing through the smartphone industry and also has deep interest in the smartphone and the evolution of the technology. During the experience, the notice of the smartphone changing little in the past three years yet its application changing ever since. The author also intuitively agrees with the Goldman and Sachs report (2013) and Yared (2013) that the smartphone and contingent technical developments are great enablers of the IoT. The next step is to argue if the process would also work in reverse: is the IoT changing the features and future of the smartphone?

To combine the enabling perspective of the smartphone with this question, the main topic of this paper is constructed: How are the emergence of Internet of Things and the evolution of the smartphone related to each other?
In order to cover this central question, the paper is divided in two parts. The first part will cover an introduction to IoT and current developments in the market. Also, it will address the following questions:

* How could the IoT influence our lives? * How is the smartphone integrated in the IoT?

The second part will cover the physical and market-related changes in the smartphone industry and will try to answer the following questions:

* How is the smartphone influencing user’s lives? * How is the smartphone changing in respect with the developments in IoT?

At the end of the paper a discussion will argue the findings and speculate on the future of the smartphone.

Internet of Things
A general definition of IoT is hard to find in the academic literature. However, there are some terms many authors agree on. One of those terms is that IoT consists literally from two components: ‘Internet’ and ‘Things’. The verge of the different views in the literature are mostly divided in two different orientations: Internet oriented and Things oriented (Mattern and Floerkemeijer, 2010; Atzori, Iera and Morabito, 2010). Fleisch (2010) argues that the term IoT does not differentiate between infrastructure level and application level, but that those differences do exist. Another common ground in the vision of these researchers is about the vision of IoT as an extension of the internet into the real world a kind of transformation into a larger realm. Interconnections between objects are creating a smart and connected environment (Gubbi et al., 2013 & Atzori et al., 2010; Mattern and Floerkemeijer, 2010)
For pragmatic reasons, this paper takes on IoT as a network of internet-enabled participants that can communicate to other devices or users, in this way constituting a next generation internet. A ‘Thing’ oriented perspective.

How could the IoT influence our lives?
The amount of possible applications for IoT is numerous. However, the current proposed market segments can be segmented using existing literature on the topic. Combining the views from Gubbi et al. (2013) and Atzori et al. (2010), the five segments to categorize applications for IoT are: Personal & Home, Enterprise & City, Healthcare and Transportation & Logistics.
IoT applications in these segments vary on different levels. Fleisch (2010) argues that these levels can be summarized as seven different value drivers for IoT applications. The levels range from simplified manual proximity triggered actions (such as pet tagging) to mind changing feedback loops that alter the behavior of users (such as smart metering and connected apps are about to do at the moment).

As Fleisch (2010) also argues, the IoT dissolves numerous media breaks that now often are needed. These media breaks represent human interaction in a certain process (be it semi-automatically in a digital environment, like sending a machine generated report, or a physical task such as taking a print out the printer to read it). This means that machine to machine (M2M) interaction is instigated by IoT and human interaction in these data streams is eliminated. We can clearly see M2M interaction in the new kind of wearables that are designed (Apple Watch, FitBit, Samsung Gear Fit). These smart watches and bands are transferring information about your health or activities to your smartphone, which delivers you statistics and possible actions you could undertake. Some of these inventions even write a weekly full blown report concerning the user’s activities/health.

How is the smartphone related to the IoT?
As already explained in the introduction, the author intuitively agrees with Goldman Sachs researchers on the notion that the smartphone is a great enabler for IoT. In many proposed applications, the smartphone is the remote operator, receiver or actuator. The smartphone acts as a mediator between people and the IoT (Mattern and Floerkemeijer, 2010; Yared, 2013) because a smartphone can use third party applications to act with its surrounding. A clear example is Philips Hue lighting, a smartphone controlled light bulb than can be configured to automatically match your wishes concerning light temperature, intensity and color (www.meethue.com).
The adoption of IoT enabled services is taking a leap and this could be because of the adoption of smartphones. In order to understand why and how the IoT is adopted by the market, we should investigate the model of diffusion of innovation by Rogers (1958).

Rogers summarized five categories, separated by time to adoption: innovators, early adopters, early majority, late majority, and laggards. The following distribution was discovered by Rogers:

Simon Sinek explained in his TEDtalk (2009) that, in order to get adopted, a great innovation must reach a tipping point between fifteen and eighteen percent adoption in the market, only then will the early majority (and the late majority and laggards after it) fall for the innovation. For the IoT to gain adoption, to get trusted, it must get adopted by at least this percentage.

Smartphones are well-adopted already; by the start of 2015, an estimated 2 billion smartphone users will be roaming the world (Brown et al. 2014). For the IoT, the relationship with the abundant smartphone could bring adoption levels to the tipping point very fast.
Rogers later found five perceived characteristics that can influence the rate of adoption. These are: Relative advantage, Compatibility, Complexity, Trialability and Observability (Rogers, 2010). Because of the smartphones’ integration in the IoT, it becomes apparent that compatibility with smartphones (and other devices) is a main driver for users willing to adopt IoT applications. As more and more people own a smartphone, the positive relative advantage of having a smartphone transforms into using your device with IoT applications in opposition to those who do not. Also, because so many own a smartphone, users should be prone to experiment with the possible applications the smartphone houses and, in turn, should be able to experiment with IoT applications easily. Using a smartphone as a gateway to IoT could also decrease complexity in use of IoT applications and cause observable positive experiences from early adopters.

The smartphone
Since the introduction of the iPhone in 2007, the new standard for mobile computer-integrated technology was set. The success of the iPhone instigated a revolution in mobile technologies that now already are widespread and common (Islam & Want, 2014). Since the beginning, the smartphone was set out to become an integrated device. It seems that technology and this vision are finally getting in line with each other(Islam & Want, 2014; Jara, Lopez, Fernandez, Castillo, Zamora, Skarmeta, 2013). Cellphones have transformed in function from making calls to computing devices that give us constant access to information and others (Islam & Want, 2014). The generation we are in is the Smartphone generation (Jara et al., 2013), where services and interaction with the world are built around smartphones.

How is the smartphone influencing user’s lives?
From the beginning on, the mobile phone industry was a fast paced and innovative industry. since 1992, mobile phones were equipped with loads of different sensors, capabilities and communication technologies (Daponte, De Vito, Picariello, Riccio, 2013). The device was shaped around many other technical innovations such as MP3 players and digital cameras. These improvements of the mobile phone’s capabilities made it a more and more common attribute for people to use, taking over applications of a broadening range of other devices. It is trivial to say that the device has shifted from its initial mere application as a phone. As mentioned above, the smartphone industry really took off after the launch of the initial iPhone in 2007. The smartphone has revolutionized the way we communicate in many different ways, one of these changes is the social connectivity powers that lie within social networks, connecting users via their smartphones (Islam & Want, 2014). The next step in changing life might concern the IoT.
As explained earlier, the IoT can dissolve media breaks (Fleisch, 2010). The smartphone could be an actor that takes over these media breaks from its user. There is reason to argue that in such a scenario, Interdependencies would shift towards the capabilities of our smartphone and the whole ‘phone’ part in smartphone should be replaced by ‘device’. A mobile device that acts for us in an integrated system of sensors and actuators could be very real as Fleisch (2010) argues.

How is the smartphone changing in respect with the developments in IoT?
Goldman Sachs investment report on IoT (2014) has identified the smartphone and the price drop in processing power as main enablers for the IoT. The price drop in hardware components is also affecting the accessibility of smartphones to the masses. Developing countries are more and more defined as growth opportunities for smartphone companies (Tesla, 2014). Besides greater affordability, Chuck Tesla (2014) defines the IoT as one of the three major demand drivers for smartphones. The smartphone is a complementary good to almost everything concerning internet, sensors, data and components.
The capabilities smartphones have to offer are increasing rapidly. This is partly due to changes in the environment, like the IoT, and partly because of the increases in processing power, accessibility to faster mobile broadband and the cost reduction mentioned earlier (Islam &Want, 2014; Daponte et al. 2014).

Daponte et al. (2014) elaborate further on the future developments in smartphones and especially on measurement applications. The research presents the smartphone as a handheld measurement device and it points out a change in usage of the smartphone. In this paper, the notion of a mobile device instead of a mobile phone is argued. The increasing arsenal of sensors equipped in the current and future smartphones transform the device into a unique measuring tool. All these sensors generate a lot of data and when connected with each other, the network of devices produce highly interesting data on physical quantities (Daponte et al. 2014).

Because of the changing applications for smartphones, the term smart device or mobile computing device should be argued. Islam & Want (2014) already speak of mobile devices instead instead of smartphones, showing their depreciation of the original function of the cellphone.

With another name could also come a different form factor. For most applications, the current configuration of a smartphone/smart device seems justified, but trends in shape are already visible. Especially an increase in screen size is remarkable. Elaborating on this, Barredo (2014) shows how smartphone screen size is increasing over the years and that besides screen size, overall phone size is also increasing. This is interesting because a larger screen or phone does not make for a better phone call. It shows us exactly what is argued: the screens that are used to control the many applications the device has, become the most important. Googles VP of engineering, Dave Burke, encourages us in this way to ask not "What is the right size for a phone?" but, "What is the right size of a pocket Internet device?" (Cnet, 2014)

Conclusion and discussion
By now, it can be concluded that the smartphone and the price drop in materials that make up smartphones have been a great enabler for the IoT (Goldman Sachs, 2014; Mattern and Floerkemeijer, 2010; Daponte et al. 2014). The IoT brings us a substantial amount of applications for smartphones or moreover smart devices (Islam & Want, 2014; Daponte et al. 2014) in different consumer or business market segments (Gubbi et al., 2013; Atzori et al., 2010)
We see great changes in the physical appearance of the smartphone while the IoT is just emerging (Barredo, 2014). This explain how smartphones are recently evolving into more of mobile computing platforms or smart devices than just being a phone (Islam & Want, 2014).

Whilst the IoT is preparing for market penetration and is looking for to be adopted by the main mass of consumers. We predict high adoptability if we look at Rogers (1985 & 2010) model of diffusion of innovation and the predictors for adoptability. Concerning the current adoption level of smartphones (Brown, 2014) and growth opportunities in emerging markets (Tesla, 2014), we see the smartphone as a carrier for IoT adoption.

The possibilities for integration of objects in the IoT seems infinite. For sure is however, as Fleisch (2010) argues, that media breaks are dissolving. Certain human activities are going to be redundant due to automated reactions that are integrated in the IoT. It is therefore interesting to see whether the smartphone is going to take over actions from the people.
Concerning the smartphone is going to be the central device in the IoT, it might also become the device that influences our lifes on a whole new level, regarding its current use, as Jara et al. (2014) already describes the current generation as the smartphone generation. The future will hold a lot more for this device and the interconnected IoT than we can imagine. It is beyond our capabilities to know what to expect, just as no one expected the smartphone to be at this stage ten years ago.

Reflection
I have learned a lot about the importance technologies in the field of IoT can yield. My personal interest in the evolution of the smartphone has led me to a greater level of understanding its evolution and by now, my understanding is academically founded. The smartphone has enabled the IoT to grow and gain ease of access and ease of use. People already have a smartphone and are now ready to integrate their phone (or device) with more devices in their surroundings. This, as a consequence, has changed the use of smartphones to such extend that the device itself is changing.
This is something I have already noticed. The past two years almost nothing has changed in smartphones (besides greater processing power, better cameras etc.). The operating systems on these devices have become mature and are now legitimate competitors of laptops and desktop computers. The smartphone is at its end, the next big thing IS the IoT and the smart device is part of it.
Something I found really interesting is the model of diffusion of innovation by Rogers (2010). This model has led me to believe the IoT is already accepted due to the high adoption rate of smartphones.
I truly believe that my paper is contributing to a better understanding of the development of smartphones as well as the development of the IoT. The perspective I offer is new but thoroughly founded, only limited by the constraints of this paper.

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