Imagine with me for a moment. It is December, 2025, and you, and your family are visiting the local mall for holiday shopping. Consumers are going in and out of stores like they have for the last century. The same festive feeling that you remember as a child is in the air, but there is one dramatic difference.
In fact, this difference is so profound that it would have shocked you just a few short years previous.
It is such a radical change from what you remember that people use to be arrested and even imprisoned for doing the same identical thing to what everyone in the mall is presently doing.
Shoppers are just taking things off the shelves and leaving the premises without stopping to pay for the items. You remember seeing similar widespread behavior during televised riots, it was called looting. Now, consumers don’t even need to worry about being caught when just carrying products out of every store.
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Am I referencing some utopian future where everything is free for everyone? Maybe perpetual motion was inventing enabling governments to ramp up the standard of living around the world? Maybe this is just a figment of an overactive imagination?
Well, the truth is, this is the likely future for everyone, and it has nothing to do with free stuff, governments, or my imagination.
You see, inside every product made in 2025 there are tiny microchips. These microchips automatically charge your account as you remove the product from the store. Despite looking like a crime, not stopping to pay is the common way business may be done in 2025.
This is far from the only way that the next industrial revolution will radically change the world.
The revolution I am referencing is built upon the backbone of the internet. It is called the Internet of Things. The Internet of Things is not some fantasy dreamed up in a Silicon Valley think tank or on the pages of a science fiction novel. The truth is that you are already using some of the rudimentary technology of the Internet of Things. Every time you use an “Easy-Pass” type device to pay your toll on a toll road, pay for gas at the pump, or even receive a redlight traffic violation ticket in the mail, among many other things, it’s thanks to the Internet of Things. Even the ubigutous taxi service Uber is an early demonstration of the Internet of Things .
One day, in the not so distant future, everything will be connected to the internet, hence the term Internet of Things.
Research and consulting firm Gartner has projected that the Internet of Things will grow to 26 billion items by 2020. This is not counting smart phones or computers. Companies involved in this revolution are expected to create over $300 billion in incremental revenue at the end of the next half decade.
The internet will actually shift away from smart phones. tablets and PC’s over time. Right now, these devices only make up about 1/3 of all internet connected devices. As the years go by, this percentage will continue to plunge as more and more items become self-internet connected.
Not only is this revolution changing the way consumers interface with business, it is radically altering the entire industrial world.
Business Insider recently listed ways how the Internet of Things will impact industry and the world. Here are the 4 most critical changes to expect.
1. Remote Sensors
Similar to what will be placed in consumer products, industry will use a variety of internet-connected sensors to assist production in multiple ways. It is these sensors that will transmit the data for the Internet of Things. Here’s a chart from Goldman Sachs illustrating how sensors have outstripped the overall semiconductor market.
- Big Data
Data is the key to the Internet of Things. A huge amount of data is generated by the internet, and even more from the Internet of Things. The need will only grow exponentially to manage and quantify these data streams.
- Automated Transportation
Self driving cars and trucks are rapidly moving from the lab to everyday use. Google (Nasdaq:GOOG) is currently testing automated cars which will soon be driving on public roads. Not to mention, Amazon (Nasdaq:AMZN) testing delivery by drone. The Internet of Things will allow these autonomous vehicles to communicate with each other and their owners.
- Smart Cities
The Internet of Things will enable truly smart cities to exist and even thrive. Smart power grids, traffic flow control, and even crime prediction will be part of the new smart city thanks to the Internet of Things.
Just like the first internet revolution, trillions of dollars will be made by savvy investors who catch the wave higher.
There are numerous companies that are poised to continue to profit from the Internet of Things revolution. With that said, the three leading companies in the space Cisco (Nasdaq:CSCO), Amazon (Nasdaq:AMZN, and Google (Nasdaq:GOOG).
- Cisco (Nasdaq:CSCO)
Cisco is clearly the leader in making the Internet of Things a reality. It’s products and services create the infrastructure that enables the connectivity to take place.
The company has developed routing technologies to control the connected things. In addition, Cisco’s Insieme Networks is solving the issue of the convergence of switching, routing, storage and computing on a common platform. The purpose of this device is that it facilitates the architecture to spread to the edge of the network providing the brains to the Internet of Things.
- Amazon (Nasdaq:AMZN)
This innovative and world-changing retailer is on the cutting edge in how the Internet of Things will interact with the end users. While doing this, Amazon is disrupting traditional supply chains and the way consumers interact with merchants. Experimentation with drone delivery, Dash Buttons and home services options.
Dash Buttons allow customers to speak to order groceries and enable the ordering of variety of staple goods via a single push of a button.
The fact that Amazon has created a developer platform that allows companies to build re-ordering buttons directly into their own hardware is truly revolutionary. For example, should you run out of Laundry detergent, a button push on the washing machine will immediately trigger the chain of events that will rapidly deliver new detergent. This is the first step in the hardware actually recognizing that its running low on disposable items and placing the order automatically.
- Google (Nasdaq:GOOG)
Google is clearly at the forefront of managing big data. In addition, the company is about to launch an android like operating system called Brillo. Brillo is important for the Internet of Things since it is expected to help with compatibility between devices. This operating system is designed for low power devices and Google expects it to offer uniformity for device manufacturers.
What You Need To Know
These three companies are the leading movers in the Internet of Things revolution, other firms like Qualcomm (Nasdaq:QCOM), AVG Technologies (NYSE:AVG), and International Business Machines (NYSE:IBM) are working diligently to make the Internet of Things a reality sooner rather than later.
The technology posessed by all six of these companies comes close to assuring that they will only continue to profit over the long term as the Internet of Things is built out. Designing a long term portfolio of these companies makes solid investment sense.
It’s important to remember that we are dealing with technology. This means that it is possible that a company could launch a very distruptive product that will knock one or more of the leading names of the throne.