analyze the IoT (internet of things), M2M market in China, from standard, technology, market prospective. based on this analysis, the author aslo identify the current challenges and potential opputunities.

1. China’s Internet of Things - Market and
Ecosystem Analysis
May, 2012
Draft v0.1, Tony Zeng,
mobility@gmail.com

2. Executive Summary – Key Findings
HIGHLIGHTS
IoT is booming in China with an average of 30% CAGR in the
coming 2-3 years. Currently the development of IoT in China is
mainly driven by the government . Other important vertical
industries, regions, and key players are identified as well in the
following slides.
Despite its promising future, IoT in China is facing some
challenges such as no well-established industry standards in
place, no well-defined business model has taken form, as well as
the lacking of end-2-end solution providers and experienced
operators

3. Executive Summary – Conclusions
HIGHLIGHTS
Opportunities have been identified in different IoT layers and vertical
markets. In the coming 2-3 years, the most important industries are
intelligent city (including public surveillance), intelligent transportation
(telematics), smart grid, and mobile payment industry
Aiming at generating revenue and gaining market share in the vertical
industries, it is critical to build up strategic alliance with int./ext.
stakeholders to deliver end-2-end solutions, trying to get involved
proactively in the standards/regulations establishment process and
develop mutual trust with the local governments through interaction
and cooperation

4. Agenda
Market and Ecosystem Analysis
Challenge and Opportunity
Product and Market Strategy
2

5. App. layer
[ Definition of IOT ] Platform and Service Layer
IoT: Internet of Things
Transfer layer
Layered Architecture:
Perception, Transfer, Platform,
Support, and Application Layers
Perception layer
3

6. IoT in China: PAST, NOW & FUTURE
EXPONENTIAL
GROWTH
916.2
604.8
418.2
303.2
190.0 211.5
2010 2011 2012E 2013E 2014E 2015E
Yr. 2011: RMB 200 billion (~$38 billon)
Yr. 2015: RMB 916 billon

7. IoT: Market Size W.R.T. Layers
3%
5%
22%
HIGHLIGHTS
37%
Currently, the perception layer,
the transfer layer, and the
platform layer constitute the
majority of the industry revenue
(adds up to 92%) in China.
33%
the support layer the perception layer
the transfer layer the platform layer
the application layer

8. China’s IoT Development Tendency
HIGHLIGHTS
Currently, 90% of the investment came from the government
It is anticipated that the enterprise/personal/home applications will ramp up starting
from 2013
# of Users Standards
Published
Public Service: Intelligent City, Public Cloud, telematics ,etc.
2010 2013 2015 2020 Year

9. Policy/Regulatory/Standard Overview
Highlights
Policy:“物联网“十二五”发展规划 was published in Nov. 2011 and was endorsed by
Chinese Premier Wen Jiabao
CCSA (China Communication Standard Association) has started the standards drafting
process from 2010, it is believed that the IoT standards will be published in 2013.

10. The Most Important Vertical Industries
The early adaptors are:
• Surveillance: Invasion detection, video
surveillance, and smart home
• Smart Grid: remote meter, site
monitoring
• Transportation: Car (i.e., taxi) Dispatching,
telematics
• Logistic: Medical/food tracking
• Others: Mobile Payment
Vertical market share per industry in China
Source: CCID, 2011

11. The IoT Ecosystem in China (need to complete
market landscape)
Government – Standard/Regulation
Sensor/IC
vendor Middleware and System Service
HW Vendor
Application Vendor Integrator Provider
Module Vendor
Test Solution Telecom Operators
Consulting
Sensor Ş Ş6 '/ ᓒÚ
ųౚ̚TI̚ 4੤ , ౚԏ/ʨ/ Ş
IC
ƶ*ࣞ ė Ş࠲ᐿࣞ
Module
Hardware ɲ' ,ॣ
Middleware/Application Vendor Oracle, ࡑѥ} ,ѢD,஠Ѥ ‫ ,ة‬᫝ࣞɰ, =ࢉ, IBM, MSFT,
System Integrator Google Android
Telecom CMCC, CU, CT
Service Provider Bank Union

12. The Most Active/Important Regions in China
HIGHLIGHTS
Currently, China's IoT industry has
formed four clusters in the Bohai
Rim Area, the Yangtze River Delta,
the Pearl River Delta and the
10Billion RMB Midwest Region.
1 Billion RMB
Revenue in a
specific region
2011 IoT Revenue in different regions of China,
Source: CATR

13. Challenge and Opportunity

14. IoT is still Intranet of Things in China
Current Status: Intranets of Things
• Fragmented architectures, no coherent unifying
concepts, solutions exist only for application silos
• No coherent approaches to implement the IoT have
been proposed, yet
• Many island solutions do exist (RFID, Sensor nets,
etc.)
• Little cross-sectorial re-use of technology and
exchange of knowledge

15. Challenges of Migrating from Intranet of things to Internet of things
Demanding
No End to end from
Regulations Solution enterprise
and and
Standards personal/
home users
Business IoT
Model is operating
not Clear experience

16. Opportunities in the Coming 1-3 Years
Get involved in Build up strategic
the drafting of alliance with high-
Standards potential vendors,
telecom op., and
service providers
Offer business
Develop projects in and technology
Participate in
vertical Industries consulting
government service
such as public
driven
projects surveillance, smart
transportation

17. Market and Product Strategy

18. Market Strategy for the coming 1-3 years
Market Strategy: Standard and government projects are the
critical grounds
IoT is still in the Winning • Align with strategic partner in order to
ramp up phase the • Act proactively together to pursue common
interest in standards establishment
and Critical • Enable delivery of end-to-end solutions
• Team up with domestic companies in order
to win government projects
require/deserve
Ground
investment
Engaging with Early Adaptors and Winning
Market Position
• Sell-through via telecom operators and service
Gaining providers
• Leverage existing customer base (such as financial
Market industry) and solution (i.e. server, cloud)
• Invest on high-potential mid-size vendors in the
Share high priority vertical industries
• Focus on the most active/important regions

19. THANKS!

20. Android V.S. Java Embedded
• From layer prospective, Android is competing with Java Embedded in the
Perception Layer
– Android is leading: Smartphone, Car Gateway, Smart TV
– Java Embedded is leading in the small footprint area: Feature Phone, Java Card, module,
Mobile Payment Card, RTOS system, RFID reader
• From Vertical Markets point of view
– Java embedded has more references in vertical markets such as finance, smart grid
• End to end solution
– Java has much better capability of delivering End-2-end Solution
– Android focus more on the terminal
• Operating Experience
– Java system has been deployed in all the layers and the operators and services providers have
gained lots of experiences

21. China Standard/Regulation Authorities
Regulation Related

22. CCSA and TCs
• Standardization Process

23. Standardization Process

24. Identifying Potential Alliance
Potential Alliance
Building Alliance is Important
• From standard prospective
• From winning government project prospective
• From end to end solution prospective
The list of Potential Alliance (TBC)
• Perception Layer: yuanwangu, ZTE, Huawei…
• Transport Layer: CU/CMCC/CT
• Platform/Service Layer: UnionPay
• Application Layer: Neusoft, Tencent…

25. Identifying Focus Area
Vertical Industries
• Government driven projects
• Intelligent Transportation
• Intelligent City
• Mobile Payments Terminal