As an analyst at McKinsey, a multinational management consultancy, Christopher Thomas will always think outside the box, so this time in the market's rush to the Internet of Things (IoT), he put forward the position of the company's Asian semiconductor market research director. The questioning of the Internet of Things is not surprising.

No analysts say the IoT market will not be big, but we still have reservations about it; "in a Industry Strategy Symposium organized by SEMI in Silicon Valley, although almost everyone With an optimistic outlook for the emerging IoT market, Thomas’ question is: “If the IoT market is not that big, or if it takes longer than expected to take off?”

A very real challenge is that the Internet of Things is not expected to generate short-term gains; Thomas quoted a recent survey, pointing out that 80% of the high-ranking business executives surveyed believe that IoT revenue is in the company's camp in 2017. The contribution of the collection is less than 10%, and 50% of the senior executives believe that the ratio is less than 5%.

Another survey shows that the consumer Internet of Things product market may be narrow--Thomas said that the average annual revenue of wearable device users is about $180,000, while the average annual revenue of users of smart home devices is about $135,000, which exceeds the global average annual household income of $7,000 too much.

Thomas also pointed out that the discussion on the future of building more chips in connected cars may miss a trend that is about to emerge. Currently, cars on the market contain up to 150 microcontrollers, but most of them are inefficient. The ground is spread across different subsystems: “As engineers redesign the car architecture to achieve autonomous driving, those subsystems will become more efficient, and the chips will be more integrated and more content processed.”

The redistribution of value in the electronics industry is taking place, and the direction is moving towards the software segment. With big data, you can look at the big picture, predict demand, create new applications and services, and have the right to decide the rules of the game. Insiders even suggested that in the early stage, the Sensor must be sold cheaply or even free. The Sensor is low pressure, and the price of the IC chip is not too expensive, so we can see that this market is different from the previous ones...

Can't make money from something other than the chip

In addition to questioning the industry's general expectations for the Internet of Things, Thomas also raised some questions about the future of smartphones, personal computers (PCs) and the Chinese market in his speech; he believes that several trends in the electronics industry are already relying on There are signs that it may change, for example, smartphones and the Chinese market are likely to experience a recession, while the PC and Japanese markets are likely to recover.

"There have been a lot of hardware engineers leaving in the smartphone industry in the past few years, which is a negative effect for the industry; "Thomas said that the smartphone industry is following the economic model of the PC - all related to the time-to-market of the product, Innovation is pushed down from the application to the semiconductor components. ”

The gross profit of smartphones has shrunk from 30% to 10%; Thomas pointed out: "This means that there is no money to keep research and development, just as the innovation of the PC industry lies only in the operating system and the processor, not in other aspects;" Intel has been in the business for nearly a decade, and three of them are responsible for the Chinese market.

The state of the smartphone industry highlights an old problem in the electronics industry: "That is, we can't make money from anything other than chips; we do more and more software work for this industry, but we don't receive compensation." Thomas estimates. Unrecognized software can be worth up to $75 billion.

The Internet of Things is not profitable in the short term, and it is impossible to make money outside the chip.

Software engineers (dark blue) within the chip company are creating value, but the revenue they earn is not as much as the hardware engineer

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