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China IoT - Market and Ecosystm Analysis


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analyze the IoT (internet of things), M2M market in China, from standard, technology, market prospective. based on this analysis, the author aslo identify the current challenges and potential opputunities.

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China IoT - Market and Ecosystm Analysis

  1. 1. China’s Internet of Things - Market and Ecosystem Analysis May, 2012 Draft v0.1, Tony Zeng,
  2. 2. Executive Summary – Key Findings HIGHLIGHTS IoT is booming in China with an average of 30% CAGR in the coming 2-3 years. Currently the development of IoT in China is mainly driven by the government . Other important vertical industries, regions, and key players are identified as well in the following slides. Despite its promising future, IoT in China is facing some challenges such as no well-established industry standards in place, no well-defined business model has taken form, as well as the lacking of end-2-end solution providers and experienced operators
  3. 3. Executive Summary – Conclusions HIGHLIGHTS Opportunities have been identified in different IoT layers and vertical markets. In the coming 2-3 years, the most important industries are intelligent city (including public surveillance), intelligent transportation (telematics), smart grid, and mobile payment industry Aiming at generating revenue and gaining market share in the vertical industries, it is critical to build up strategic alliance with int./ext. stakeholders to deliver end-2-end solutions, trying to get involved proactively in the standards/regulations establishment process and develop mutual trust with the local governments through interaction and cooperation
  4. 4. Agenda Market and Ecosystem Analysis Challenge and Opportunity Product and Market Strategy2
  5. 5. App. layer[ Definition of IOT ] Platform and Service LayerIoT: Internet of Things Transfer layerLayered Architecture:Perception, Transfer, Platform,Support, and Application Layers Perception layer3
  6. 6. IoT in China: PAST, NOW & FUTURE EXPONENTIAL GROWTH 916.2 604.8 418.2 303.2 190.0 211.5 2010 2011 2012E 2013E 2014E 2015E Yr. 2011: RMB 200 billion (~$38 billon) Yr. 2015: RMB 916 billon
  7. 7. IoT: Market Size W.R.T. Layers 3% 5% 22% HIGHLIGHTS 37% Currently, the perception layer, the transfer layer, and the platform layer constitute the majority of the industry revenue (adds up to 92%) in China. 33% the support layer the perception layer the transfer layer the platform layer the application layer
  8. 8. China’s IoT Development Tendency HIGHLIGHTS Currently, 90% of the investment came from the government It is anticipated that the enterprise/personal/home applications will ramp up starting from 2013# of Users Standards Published Public Service: Intelligent City, Public Cloud, telematics ,etc. 2010 2013 2015 2020 Year
  9. 9. Policy/Regulatory/Standard OverviewHighlightsPolicy:“物联网“十二五”发展规划 was published in Nov. 2011 and was endorsed byChinese Premier Wen JiabaoCCSA (China Communication Standard Association) has started the standards draftingprocess from 2010, it is believed that the IoT standards will be published in 2013.
  10. 10. The Most Important Vertical Industries The early adaptors are: • Surveillance: Invasion detection, video surveillance, and smart home • Smart Grid: remote meter, site monitoring • Transportation: Car (i.e., taxi) Dispatching, telematics • Logistic: Medical/food tracking • Others: Mobile PaymentVertical market share per industry in ChinaSource: CCID, 2011
  11. 11. The IoT Ecosystem in China (need to complete market landscape) Government – Standard/Regulation Sensor/IC vendor Middleware and System Service HW Vendor Application Vendor Integrator Provider Module Vendor Test Solution Telecom Operators ConsultingSensor Ş Ş6 / ᓒÚ ųౚ̚TI̚ 4੤ , ౚԏ/ʨ/ ŞIC ƶ*ࣞ ė Ş࠲ᐿࣞ ModuleHardware ɲ ,ॣMiddleware/Application Vendor Oracle, ࡑѥ} ,ѢD,஠Ѥ ‫ ,ة‬᫝ࣞɰ, =ࢉ, IBM, MSFT,System Integrator Google AndroidTelecom CMCC, CU, CTService Provider Bank Union
  12. 12. The Most Active/Important Regions in China HIGHLIGHTS Currently, Chinas IoT industry has formed four clusters in the Bohai Rim Area, the Yangtze River Delta, the Pearl River Delta and the 10Billion RMB Midwest Region. 1 Billion RMB Revenue in a specific region2011 IoT Revenue in different regions of China,Source: CATR
  13. 13. Challenge and Opportunity
  14. 14. IoT is still Intranet of Things in China Current Status: Intranets of Things • Fragmented architectures, no coherent unifying concepts, solutions exist only for application silos • No coherent approaches to implement the IoT have been proposed, yet • Many island solutions do exist (RFID, Sensor nets, etc.) • Little cross-sectorial re-use of technology and exchange of knowledge
  15. 15. Challenges of Migrating from Intranet of things to Internet of things Demanding No End to end from Regulations Solution enterprise and and Standards personal/ home users Business IoT Model is operating not Clear experience
  16. 16. Opportunities in the Coming 1-3 Years Get involved in Build up strategic the drafting of alliance with high- Standards potential vendors, telecom op., and service providers Offer business Develop projects in and technology Participate in vertical Industries consulting government service such as public driven projects surveillance, smart transportation
  17. 17. Market and Product Strategy
  18. 18. Market Strategy for the coming 1-3 yearsMarket Strategy: Standard and government projects are the critical groundsIoT is still in the Winning • Align with strategic partner in order toramp up phase the • Act proactively together to pursue common interest in standards establishmentand Critical • Enable delivery of end-to-end solutions • Team up with domestic companies in order to win government projectsrequire/deserve Groundinvestment Engaging with Early Adaptors and Winning Market Position • Sell-through via telecom operators and service Gaining providers • Leverage existing customer base (such as financial Market industry) and solution (i.e. server, cloud) • Invest on high-potential mid-size vendors in the Share high priority vertical industries • Focus on the most active/important regions
  19. 19. THANKS!
  20. 20. Android V.S. Java Embedded• From layer prospective, Android is competing with Java Embedded in the Perception Layer – Android is leading: Smartphone, Car Gateway, Smart TV – Java Embedded is leading in the small footprint area: Feature Phone, Java Card, module, Mobile Payment Card, RTOS system, RFID reader• From Vertical Markets point of view – Java embedded has more references in vertical markets such as finance, smart grid• End to end solution – Java has much better capability of delivering End-2-end Solution – Android focus more on the terminal• Operating Experience – Java system has been deployed in all the layers and the operators and services providers have gained lots of experiences
  21. 21. China Standard/Regulation Authorities Regulation Related
  22. 22. CCSA and TCs• Standardization Process
  23. 23. Standardization Process
  24. 24. Identifying Potential Alliance Potential Alliance Building Alliance is Important • From standard prospective • From winning government project prospective • From end to end solution prospective The list of Potential Alliance (TBC) • Perception Layer: yuanwangu, ZTE, Huawei… • Transport Layer: CU/CMCC/CT • Platform/Service Layer: UnionPay • Application Layer: Neusoft, Tencent…
  25. 25. Identifying Focus Area Vertical Industries • Government driven projects • Intelligent Transportation • Intelligent City • Mobile Payments Terminal