What could be driving the decline of IoT innovation?

20-01-2022 |   |  By Robin Mitchell

Verdict’s recent data shows a decline in patent applications in the IoT industry. What factors hinder the development of IoT devices, how significant are these factors, and what does it tell us about the future of IoT?

What factors hinder the development of IoT devices?

The IoT industry has undoubtedly taken the world by storm, with the global number of devices now exceeding 30 billion. These devices can range from trivial internet-enabled thermometers all the way to high-end industrial remote sensors used to monitor gas leaks, and it is clear that the IoT industry has touched almost every aspect of life.

However, the rapid development of IoT devices unhindered by regulation led to billions of devices being devoid of reliable security measures. It was not uncommon for devices to use default passwords, no password, no encryption, and easily accessible programming ports. The result of this wave of insecure devices has been a multitude of cyberattacks on networks and infrastructure causing chaos and data leaks.

Therefore, governments worldwide have had to begin introducing legislation into the development of IoT products. Such regulations now require IoT devices to use unique passwords that are not easily guessed, require encrypted messaging when communicating over the internet, and provide users with a method for reporting bugs in products directly to the manufacturer for patching.

Fast forward to today, and new data published by Verdict shows an interesting trend in the development of IoT products; IoT innovation is slowing down. The newly published data shows a three-month trend of falling IoT patent applications and grants from typically 1,000 to 800. Innovations in IoT devices generally encompasses applications in which IoT devices can be utilised, new methods for recording data, new designs for products, and future concepts that could improve the industry.

Thus, we arrive at the question, “does this government regulation hinder IoT development?”. The answer to this question is most likely yes, but we also need to consider other factors that could hinder the development of IoT devices.

Another contributing factor will undoubtedly be the increasing limitations of IoT devices that are yet to be discovered. IoT devices, at their heart, are internet-connected devices, and it may turn out that there is not much else they can do. There are only so many different ways a thermometer or kettle can be designed, and the concept of gathering data and sending it over the internet is not new.

IoT development could also be hindered by the growing concerns about privacy. It is well known that IoT devices have often been involved with breaches of privacy, and the increasing interest in data security and personal data control could see IoT devices become less popular with the general public.

The recent COVID pandemic also directly resulted in a semiconductor shortage. Having less access to semiconductors can make it difficult to design new products, and the inability to produce a product en masse due to component shortages means that there is no point in new projects.

How significant are these factors?

Trying to determine how significant these factors are in the declining development in the IoT industry is extremely difficult. However, it is most likely that the biggest drawback in developing IoT devices is a combination of the current semiconductor shortage, the growing limitations of IoT devices, and the falling popularity of IoT devices.

Government regulation undoubtedly upsets the ability for engineers to develop new ideas, but most regulation that has been introduced is nothing more than a hurdle that can easily be overcome. For example, devices requiring unique passwords is something that has been done for years with the use of clever production programming stages and stickers, and the removal of default passwords is trivial. Having devices use encryption is already an industry standard, and requiring a portal for customers to report bugs is easily done with a single contact form page on a website. For these reasons, it is unlikely that government regulation affects the development of IoT devices.

However, the falling popularity of IoT devices could be a major contributor. Smartphones and computers can easily, and often are, used to invade personal data and privacy, whether through criminal activity or intrusive digital contracts with services. But the benefit of these devices is incalculable, and thus the risk of losing privacy in exchange for free information and applications (office, gaming, and artistic) is worth it.

IoT devices also suffer the same problems with privacy. Still, unlike computers and smartphones that offer so much in return, IoT devices are generally more of a neat gadget or add some small amount of convenience. As such, the benefits do not outweigh the potential damage that they can cause, which may put consumers off.

What does this tell us about the future of IoT?

Just because patent applications fall does not mean that IoT is losing popularity; it could simply be that the quality of applications being filed is increasing. This is evident in that the significant drop in applications has reflected only a slight decline in grants. But what is clear is that a falling number of applications will result in fewer IoT developments.

Of course, this trend may be a good thing for the IoT industry as more pointless IoT products are replaced with better quality products. Removing these products would also help prevent more regulation as the industry (and consumers) recognise the importance of security and start to “self-regulate”.

It is possible that IoT moves away from homes and consumers and instead move towards industry and smart cities. Unlike homes, these sectors can benefit from IoT devices far more, with some examples including traffic control, production efficiency improvements, predictive maintenance, and infrastructure monitoring.

Overall, IoT innovations are dropping. While we cannot be sure what is causing this, the last two years have been unbelievably disruptive to life as well know it, so it is no wonder why innovation is struggling.


By Robin Mitchell

Robin Mitchell is an electronic engineer who has been involved in electronics since the age of 13. After completing a BEng at the University of Warwick, Robin moved into the field of online content creation developing articles, news pieces, and projects aimed at professionals and makers alike. Currently, Robin runs a small electronics business, MitchElectronics, which produces educational kits and resources.

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