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Telecom providers. Today’s cellular phone networks are not well equipped to handle the demands of the Internet of Things. IoT applications will require not only a great deal of data capacity, but will also need it to be less expensive than current mobile voice or data service. Moreover, IoT devices need to work on low power. Telecom service providers that are able to deliver lower-cost and lower-energy communication services will have a distinct advantage in serving the growing IoT market.

Simply providing communications services is likely to become a commodity business. So to capture a disproportionate share of IoT value, telecom providers will likely have to go beyond their horizontal platform roots by investing in other levels of technology and developing vertical knowledge to create solutions. McKinsey Global Institute The Internet of Things: Mapping the value beyond the hype 125 Conclusion The Internet of Things has transformative potential for many types of participants and stakeholders.

Technology suppliers are presented with the opportunity to develop new and valuable systems and create new sources of revenue and lines of business. Businesses that adopt IoT systems can improve operations and gather greater insights for datadriven decision making; some will have the opportunity to build new businesses with IoT technology and data. Consumers will have the most to gain—perhaps years of life from IoT health applications and safer transportation, greater convenience and time savings, and less costly goods and services. To build competitive advantage in the IoT market, technology suppliers will need to create distinctive technology, distinctive data, software platforms, or end-to-end solutions.

Those that fail to do so risk commoditization and loss of business. Business users of IoT technology will need to change their systems and organizations in order to make the most of the Internet of Things. They will need to invest in capabilities, culture, and processes as well as in technology. Businesses that fail to do so are likely to fall behind competitors that do. Smaller companies will need to find ways to obtain data on the scale required to compete with larger companies that will have access to sufficient data in-house.

While consumers stand to reap the greatest benefits from the Internet of Things, they will have to balance potential benefits with privacy concerns. They can gain access to an unprecedented amount of information about themselves and the world around them that can improve their quality of life. But consumers will have to be discerning about how they engage with that information and with whom they share it.

Finally

Finally, policy makers and governments will have to ensure that these new systems are safe and that IoT data are not being stolen or abused. They can help to balance the needs for privacy and protection of private data and intellectual property with the demands of national security. With vital infrastructure connected to the Internet, security threats will multiply, which governments will need to address. Policy makers also have an important role in enabling the Internet of Things by leading and encouraging standards that will make interoperability and widespread adoption possible.

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