A trillion sensors

September 01, 2014

September 01, 2014

Bernie Cole,’s site editor, does a great job each week summarizing a mashup of data about topical subjects. Recently he reported that GE, Cisco, and others predict that by the end of the decade about 1 trillion sensors will be deployed and connected to the Internet, with a market value of $15T. This is part of the so-called ‘Internet of Things’.

(Daily we’re faced with ridiculous IoT hype as if this were some new concept. Has everyone forgotten the notion of ‘embedded systems’? For about 20 years we’ve been building devices with sensors that connect to the Internet; before that, they were hooked up to a variety of ad hoc networks. The IoT is a new marketing buzzword and nothing more.)

Charles Manning, a frequent commenter and email correspondent, applied a bit of engineering analysis to the notion of a trillion sensors. I’ve scoffed at the 1T number for some time, and now, expanding on Charles’ thinking, I am even more convinced that this is all some marketing person’s pipe dream.

The web page for the TSensors Summits claims about 10 billion sensors (or something like that; the wording is unclear) were sold in 2013. So it seems in the next five years a median of 200 billion will be sold annually to reach the 1T number.

Graphic courtesy of Motherboard

Does it seem likely that we’ll see a jump in shipments from 10B/year to 200B in the next twelve months? Not really. So presumably the final year of this decade will show the bulk of sales, with far more than 200B pushed out the door that year. If shipments double every year then the aggregate sum of devices will be a bit over 1T, with about 470B shipped in 2019 alone.

According to an article titled Poverty Around the World published by Global Issues, about half the people in the world live on less than $2.50/day; fully 80% squeak by on less than $10/day. It’s hard to imagine buying sensors instead of food. If the 20% with money represent the market, then 1.6B of the expected 8B people in the world in 2020 will be buying these devices. Per capita, that’s 300 Internet-connected devices each in 2019 alone. How many e-gadgets did you buy last year?

What about IP addresses? Only 4% of today’s connections use IPv6; 96% are on IPv4, which can accommodate only 4B devices. Of course, with the Dynamic Host Configuration Protocol (DHCP), network address translation (NAT), and other fixes some space can be recovered, but most addresses have been allocated. So the 1T sensor world will require an immediate and massive switch to the new IP system, which isn’t supported by most routers today.

The $15T valuation of these devices represents 4% of the cumulative world GDP over the rest of the decade. It’s hard to make sense of this number. World semiconductor shipments are around $350B today, so the ICs in these gadgets will be just 2% of the value chain, unless the IoT boom makes the semiconductor industry explode. Maybe we should run out and buy stock in ARM!

A device like a mobile phone has a lot of sensors, and, happily, each sensor does not have its own IP address. But the reason there are so many is that they cost nothing. A MEMs device is pennies in the enormous quantities used. So how can they contribute much to the $15T number? For decades one truism has been that electronics costs decline at a staggering rate. A transistor, CPU, or MEMs device that costs a buck today will sell for a penny tomorrow.

$15T is a mouth-watering figure to a venture capitalist or CEO. Figure on seeing a lot of startups...and tons of bankruptcies. Sure, the semiconductor/IoT/device market will continue to grow, but these numbers veer into absurdity.

Meanwhile, we engineers will be quietly building these devices - and much more.

What’s your take on the IoT and a trillion sensors?

Jack G. Ganssle is a lecturer and consultant on embedded development issues. He conducts seminars on embedded systems and helps companies with their embedded challenges, and works as an expert witness on embedded issues. Contact him at His website is

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