Commentary

SoftBank Places $32 Billion Bet On Internet Of Things

The scope of the Internet of Things is continually magnified.

First, there’s the sheer size.

With estimates of more than 600 million wearables in use by 2020, 16 billion IoT devices by the following year and 100 billion connected devices by 2025, the market is on tap to be flooded with Internet-connected devices.

And then there’s the growth rate.

The wearables market has grown more than 125% over the last year, smartwatch shipments are up more than 300% and virtual reality headset sales are up by about 500%, based on recent studies.

And then there’s the money. As in very big money.

The value of wearables sold this year should pass $14 billion while heading to more than $40 billion in four years, virtual and augmented reality headset sales should reach $15 billion by then and IoT revenue should top $350 billion.

As the money around the Internet of Things increases, so too will investments and acquisitions. Some examples:

  • General Motors invested $500 million in car-hailing service Lyft, which works much like Uber
  • Samsung announced an investment of $1 billion, with half of it going to IoT startups in the U.S.
  • Google bought Nest Labs, of smart thermostat fame, for $3 billion
  • Facebook plunked down $2 billion for virtual reality star Oculus VR

Not small dollars, but they’re getting bigger.

Japanese powerhouse Softbank just agreed to buy ARM Holdings for a cool $32 billion. ARM’s lower power chip designs already power most of the smartphones on the market.

More importantly, the company is in prime position to lead the chip designs for all things IoT heading into consumers’ homes.

But the ARM acquisition is not in a vacuum.

SoftBank also owns Pepper the robot, already relatively big in some businesses and homes in Japan and launching in the U.S. this year. The robot even has even teamed with an agency in the U.S.

The Japanese conglomerate also has invested in Boston-based Swirl, which has more than $18 million in investments and is well-positioned for ad delivery via beacons at retail. SoftBank also invested in wearables market-leader Fitbit.

The ARM acquisition moves SoftBank to earlier in the IoT value creation food chain.

SoftBank IoT investments now run from chip creation to usage on things that people wear, to how marketers interact with consumers on location to how they interact with robots.

SoftBank is betting big on the Internet of Things, end to end.

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Samsung, UnderArmour, Microsoft and Philips Lighting presenting at the MediaPost IoT Marketing Forum Aug. 3 in New York. Check out the agenda here.

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