The term Internet of Things (IoT) has several interpretations, ranging from smart home-related products to a universe of all connected devices. Along with the appealing value-propositions derived from the Internet-connectability of these devices, several other ancillary trends are driving the development and adoption of connected devices.

• Increase in broadband penetration – Broadband penetration in the U.S. has been increasing steadily since 2009 and is now approaching market saturation, creating a larger accessible market for connected devices. Due to high competition in the markets for broadband services, service providers have been very responsive to consumer demand for high speeds.
• Development of wireless networking technologies – A growing number of wireless technologies now enable communication among devices. These technologies include: Wi-Fi, Bluetooth, Zigbee, Z-Wave, Insteon, DECT and Thread. Peer-to-peer solutions such as AllSeen, DLNA, and UPnP are also accelerating development; these allow direct device-to-device communication.
• Growth in mobile control initiatives – Smart device manufacturers now make them controllable from devices beyond themselves such as smartphones and tablets, both of which have high penetration rates in broadband households. 78% of broadband households now own a smartphone and 63% own a tablet. Ownership of these devices continues to increase year-over-year throughout broadband households.
• Reduction in the cost of connected devices – The cost of connected devices is lower than in the past, making them more easily affordable for more consumers.  A reduction in the cost of producing technical products and rapid technological innovation have increased competition in the marketplace for connected technical products and services, forcing providers to accept lower margins to remain competitive.
• Increase in market familiarity – The marketing efforts of large companies promoting smart home systems are gaining traction, educating the general public regarding the capabilities and value propositions of connected home systems. These companies include security providers such as ADT, cable operators such as Comcast and Time Warner Cable, and telecom operators such as AT&T. 

The net result of these drivers is a dramatic increase in the number of devices in the home and significantly higher industry expectations for future IoT growth.

For more information on the growth of the IoT and the implications for service providers, see Parks Associates’ 1Q 2015 industry report Tech Support: Meeting IoT Demands.

Further Reading:

• Key Competitive Elements for Smart Home Service Providers
• A New Customer Experience: IoT and the Connected Consumer
• 60% of consumers self-install smart home devices, but majority of device owners would prefer professional assistance