Everything you need to know about the Internet of Things

Starting a robot vacuum cleaner via app, tracking sports activities via wearables and playing your favorite music via voice assistants such as Siri or Alexa: The Internet of Things (IoT) is already part of our everyday lives and various other areas. But what exactly does the term mean in theory and practice, what are the advantages and challenges of the In-ternet of Things – and how did it all start in 1990 with a toaster in the office?

A day with the Internet of Things

Every morning, the shutters open at the set time, the heating in the bathroom is turned on automatically and the coffee machine already brews the first cup. When you leave for work, the garage door opens, the door locks itself and the alarm system is activated. On the way to work, the connected smart car receives information about a traffic jam and suggests a new route on its own. And in the company, the production plant of the smart factory already communicates directly with the ordering system and logistics so that the goods are produced accordingly. All these connected and intelligent devices and machines are part of the Internet of Things, or IoT in short

Definition of IoT: What is the Internet of Things?

The Internet of Things (IoT) connects physical objects with the virtual world. Intelligent devices and machines are connected to each other and digitally to the internet. With the help of technology, they collect relevant information about their local environment, analyze and link it. Based on this information, the devices perform specific tasks. For example, a sensor measures the outside temperature, whereupon the smart device in which it is installed turns up the heating. All this happens automatically, without any active intervention by the user. If desired, the user can control the IoT devices remotely, for example via an app on a smartphone.

This is possible thanks to the interaction of connected components such as microcontrollers, sensors and actuators that convert electrical impulses into pressure, movement, temperature or other mechanical variables. IoT systems are complex: They combine individual devices, databases and gateways that connect several networks. They are linked to the internet via a mostly wireless interface and send data or, conversely, receive commands. In the background, the sensitive data is protected and secured by security solutions during transmission.

As a technology partner, Infineon offers customized IoT solutions for each of these segments, for example for industry and device manufacturers:

  • Sense: Sensors collect a variety of information from the environment, which is converted into digital data.
  • Compute: This data is processed by microcontrollers and control signals are generated based on the results.
  • Actuate: The control signals are recognized by actuators, which convert them into actions.
  • Connect: Connectivity components connect IoT devices to each other and cloud systems.
  • Secure: Components for security protect and secure sensitive data from unauthorized access.
Why are sensors so important for the Internet of Things?

Why are sensors so important for the Internet of Things?

Thanks to their five senses, humans can understand their surroundings – machines need sensors for this. As sensory organs, they are therefore the most important data suppliers throughout the Internet of Things. There are different types of sensors: for example, for detecting temperatures, humidity, movements, light, mechanical pressure, CO2 content, ultrasound or air pressure. The respective sensor on an object measures the state of its environment, and the microcontroller in the system processes the collected data. This data is then transmitted to software via the network. The sensor can be paired via Bluetooth with a smartphone app, through which the user can access the data. Alternatively, the information is sent via internet to a cloud platform where the data is analyzed. For example, if a sensor in the smart home provides information that it is getting dark, the shutters are lowered. In industry, temperature sensors can be used in a smart factory to precisely control heating or cooling valves, for example. They measure how warm or cold it is in a room or hall – and the valves react depending on the measurement result.

The evolution to IoT – it started in 1990 with a toaster

The Internet of Things as a technological infrastructure emerged in the 2000s. But an everyday object that could wirelessly pass on information about its condition existed even earlier: In 1982, computer science students in Pittsburgh, USA, monitored the fill level of a vending machine with the precursor of the internet. The first connected household appliance followed in 1990, in the early days of the World Wide Web – even before the first website, which was launched in 1991: U.S. software and network expert John Romkey and Australian computer scientist Simon Hackett connected a toaster to the internet during a conference. It could be switched on and off online – this toaster is now considered the first IoT device.

The term "Internet of Things" was defined in 1999 by the British researcher Kevin Ashton. The expert in sensor and identification technologies at the Massachusetts Institute of Technology used it to describe passive RFID tags. RFID (Radio Frequency Identification) is a technology in which a reader can read and store data from a radio label (tag) without contact. Here, too, physical objects were connected to the virtual world, but only in a limited area. A little later, in 2000, the electronics company LG presented the idea of an internet-enabled refrigerator: It sends a notification when the supply of cheese, butter or eggs has run out.

Connectivity has increased significantly since then: As early as 2008, more devices were connected to the internet than there were people on Earth – as network specialist Cisco determined in its white paper "How the Next Evolution of the Internet Is Changing Everything". This referred not only to smartphones and computers, but to all kinds of objects. In the future, more and more devices will be smart: Around 75 billion devices worldwide will be connected to the Internet in 2025.


What are the benefits and application areas of IoT?

The Internet of Things is already anchored deeply in our lives: Intelligent devices, or "smart devices", can now be found quickly in private households, factories, vehicles, healthcare and cities. There are good reasons for this, because the use of IoT offers many advantages: They can make our everyday lives more convenient and improve production processes by saving time and costs, save electricity and energy through greater efficiency, and protect the environment at the same time. Smart devices can also optimize traffic flow and simplify life in megacities. We want to show you five examples of IoT from different application areas:

IoT in Industry 4.0

Industry 4.0 is referred to as the fourth industrial revolution: After the steam engine (Industry 1.0), electrical energy (Industry 2.0) and the computerization of production (Industry 3.0), now comes the smart connectivity of machines, goods and plants. The entire value chain is becoming digital, more efficient and more intelligent – in industry, therefore we also speak of the Industrial Internet of Things (IIoT). In largely automated processes, for example, products communicate with devices and can independently trigger the next step in production. Machines recognize malfunctions and request maintenance themselves. Manufacturing robots and transport vehicles exchange information independently with warehouse logistics. In addition to efficiency, safety for employees also increases: If forklifts or machines are equipped with sensors, they scan their surroundings and stop even before an accident can occur. Thanks to the collection and analysis of data, completely new services and business areas are also emerging. In this way, a company can use the Internet of Things to make its portfolio more flexible and offer additional services.

In the connected infrastructure of Industry 4.0, processes can be planned more easily, and goods can be produced more quickly. This saves time and storage costs – but digitization and the technology required for it also increase energy costs. According to the study "Ressourceneffizienz durch Industrie 4.0" by VDI, the interaction between digitalization and resource efficiency is viewed positively. IoT solutions make efficient use of resources, and energy-efficient components increase the contribution to sustainability, which at the same time means a lower environmental impact. Another potential for more sustainable production lies in the high-speed mobile network of the future: 5G. The reason: transmitters search for the receiving device and transmit only when needed. If a connection is no longer needed, it is terminated.

IoT in the smart home

Welcome to the smart home: The light switches itself on and off in the evening, intelligent electricity meters record and regulate electricity consumption. In a smart home, various everyday objects are connected, such as coffee machines, washing machines, refrigerators, thermostats and light switches. The various devices are linked via a central unit – called a hub or gateway – and connected to the internet. IoT devices in the smart home can not only provide more comfort and energy efficiency, but also more security: For example, connected surveillance cameras and smoke detectors automatically forward information to the mobile devices of the users and contact emergency services directly in case needed. In the smart home, users can also use voice commands to their digital assistant to control the light or music, hear the weather or news read aloud, or order goods online.

IoT in the e-health sector

The Internet of Things is changing healthcare: Wearables such as fitness wristbands, smartwatches or fitness trackers are worn on the body and can record health data, such as pulse or blood pressure. This data can be clearly analyzed with diagrams or graphics via an app. In addition, IoT in the e-health sector is already enabling smart medical devices such as pacemakers or blood glucose monitors. If they detect a problem, they immediately alert the user or the emergency service. E-health devices can thus ensure that elderly or sick people live more safely at home. Smart medicine doses determine whether patients have taken their medicine and fall sensors in carpets report when they have fallen. Connected medical devices are also being used in hospitals: intelligent beds, for example, provide information about occupancy rates. Results from the laboratory and measurements from various devices are then combined and automatically recorded centrally.

IoT in smart cars – connected vehicles

Automobiles are becoming more and more intelligent: Smart cars are equipped with control units and semiconductors, including radar sensors. These measure speed and distance to determine how close another object or person is. Since April 2018, every new car in the EU has also been equipped with the "eCall" emergency call system, which can automatically call for help after an accident thanks to the built-in cellular card. Connected vehicles are also connected via Wi-Fi or mobile communications, which provides drivers with information about traffic jams, for example. Via the internet and with the help of "over the air updates" ("OTA"), the software of vehicles can be maintained more quickly – without having to go to the workshop.

In the future, connected cars will also be automated. This will also require various sensors as IoT components: Ultrasonic sensors detect obstacles, radar sensors detect other road users and measure their speed and position, video sensors provide additional information. Among other things, connected vehicles are intended to make road traffic safer. According to the "Connected Car Effect 2025" study by Bosch, safety systems and cloud-based functions could prevent 260,000 accidents with injuries in Germany, the U.S., and China alone in 2025.

IoT in the smart city

The age of cities: More than 50 percent of the world's population now lives in cities, according to the German Federal Ministry for Economic Cooperation and Development. The trend is rising – by 2050, the proportion is estimated at 80 percent. The number of megacities with more than ten million inhabitants will also increase. These developments will create challenges, for example in terms of infrastructure or air quality. The cities and megacities of the future must therefore become more sustainable and safer in order to improve people's quality of life. The buzzword smart city covers ideas and concepts that support this through connected technologies. They come from various areas such as energy, mobility, urban planning, administration and communication. Here are four examples for ideas and concepts:

  • Traffic lights switch the required lane to green as soon as a fire truck or bus approaches.
  • Streetlights switch on or off as needed and could provide greater safety with the help of integrated cameras.
  • Digital systems control the infrastructure of public transportation, as well as water, wastewater and recycling systems.
  • Citizens can perform administrative services online to save time and paper.

How do IoT devices communicate with each other in industry?

For industrial processes to be automated on the Internet of Things, devices must be able to communicate with each other without human intervention. A machine-to-machine (M2M) infrastructure enables the exchange of information between vehicles, systems, vending machines, containers, electricity, gas and water meters or robots – and also with a central control station. M2M requires one data endpoint (DEP) at a time, which is the device or machine. In addition, a communication network and a data integration point (DIP) are required, for example a server. A practical example: A plant produces goods and sends the quantity of raw materials to the server via Wi-Fi. The server monitors remotely whether the machine requires maintenance or new raw materials. In addition to the sensors, the devices have a transmitter for communication, with the help of which they transmit data via the communication network – via mobile radio, Wi-Fi, fixed network, Bluetooth, satellite radio or RFID. The receiver is a control center, like a server. It collects the information, processes it and triggers an action based on the results.

Internet of Robotic Things (IoRT)

In addition to the term IIoT (Industrial Internet of Things), IoRT (Internet of Robotic Things) is slowly gaining ground. It is an extension of the IoT to include robots that can perceive and interact independently with the help of their technology. IoRT is considered the next stage of robotics: Robots communicate and learn from each other in a digital network. What is special about this is that robots can actively learn from each other without being fully programmed for all possible scenarios beforehand.



Internet of Medical Things (IoMT)

One area with just as much growth potential is the Internet of Medical Things (IoMT): the smart connection of systems and services in the healthcare sector – including patients and medical professionals. For medtech companies, the analysis of millions of generated data offers an opportunity to reduce costs and coordination in healthcare. Particularly two areas have grown as a result of the Corona pandemic: telemedicine and telehealth. As a result of Corona regulations, more and more medical appointments have been scheduled online and conducted via video chat. This is a trend that will continue to gain traction and be driven forward even after the pandemic – for example, with location-independent online therapies supported by learning content via app. The advantages here lie primarily in flexibility, easy planning via online tools, and time savings for all involved.

Challenges in IoT

Numerous examples show: The smart devices on the Internet of Things are helping to simplify our everyday lives. They open opportunities and potential for greater convenience, better communication, higher quality of life and more efficient business. Nevertheless, they also create various challenges that should not be overlooked – such as data security in the digital age.

Big Data and security in the IoT

The amount of data collected worldwide is exploding: While 16.1 zettabytes (ZB) were generated annually in 2016, this figure is expected to increase tenfold to 163 zettabytes by 2025, according to market researchers at IDC. In addition to private devices such as wearables or smart speakers, industrial devices in the Internet of Things are also making a strong contribution to this – with an upward trend. They collect huge amounts of data. This also creates challenges in data protection and data security. While data security focuses on preventing unauthorized access to data, data protection is about protecting our privacy.

Basically, data is the foundation of the Internet of Things. It is their evaluation and analysis that make everyday life smart. However, when devices are connected to the Internet or are digitally connected, they also become vulnerable. Cybercriminals can take over their control, spy on data or even sabotage industrial plants. In 2015, two attackers broke into the infotainment system of a connected car just to show that it could be done easily. They turned off the engine and turned on the radio. In the worst case, criminals can even paralyze the infrastructure of a region or an entire country this way: That's what happened in Liberia at the end of 2016, when the Internet went down there. According to reports, attackers had connected millions of IoT devices to form a botnet and then carried out distributed denial of service (DDoS) attacks. In such "DDoS" attacks, simultaneous requests from numerous devices are sent to a server – until it is overloaded and unable to respond. Attackers could also control surveillance cameras, spy on users or switch off transmission. IoT devices such as wearables and smart speakers in the smart home are often inadequately protected because uniform security standards do not yet exist here. In companies and Industry 4.0, there is a risk of production downtime if criminals paralyze smart machines or steal sensitive data.


New challenges are also emerging for data protection: The question is what happens to all the data and where it is stored. The manufacturer of a fitness tracker, for example, could use the information collected to create an accurate user profile and link it to other data. Just as in industrial operations, the information must be effectively protected from access by anyone unauthorized. Otherwise, not only is the data at risk of being stolen; criminals can also take over the identity of private users or certain employees and access bank accounts or email inboxes, for example.

But how can such attacks be prevented? It is crucial that communication between the devices and servers is secured. Effective protective measures include reliable access management with security authentication and encryption of the transmitted data. Intelligent devices, connected vehicles and Industry 4.0 systems must therefore be protected in order to effectively counteract data theft, fraud, manipulation and other attacks.

Lack of compatibility and ever-increasing performance requirements

Another challenge for manufacturers of IoT devices is the device- and platform-independent development of applications. Sensors, platforms or operating systems nowadays often only work together with certain systems. Therefore, the requirements for the individual components of a device vary. Ideally, there is a need for cross-platform hardware and software solutions and, at the same time, specific software for certain applications. In addition, the demands placed on devices are increasing, which presents manufacturers with further challenges. Sensors and semiconductors should become ever more powerful and smarter, be safer and have only low delays. At the same time, however, they should become more environmentally friendly and consume less power, as well as being as small and inconspicuous as possible.

IoT for more sustainability

Whether privately or in industry, the Internet of Things offers a wide range of opportunities to digitize, simplify and make processes more efficient. In addition to economic benefits such as cost savings in production, IoT offers great potential for greater sustainability and a more environmentally friendly future, especially in industry. A topic that the World Economic Forum addressed in a study: 84 percent of the IoT solutions considered had the potential to contribute to the United Nations' sustainability goals.

1. Less raw materials and resources
An example from everyday life that everyone is probably familiar with: digital processes and the connection of systems reduce paper consumption. Where once every document was printed out for filing and sorted into folders, space has now been created for new things thanks to servers and cloud systems. This does not make the digital process of IoT solutions completely climate-neutral – but more and more companies are attaching importance to green energy and climate-neutral business in order to compensate for any emissions that arise.

2. Energy efficiency through IoT
Smart buildings and smart homes have one thing in common: they save energy costs by measuring energy consumption and identifying potential savings. For example, lights turn on and off automatically, open windows are detected, and all systems can be monitored and controlled by app at any time. Likewise, IoT applications in the energy industry are a key to greater energy efficiency – not least through semiconductor solutions from Infineon, energy efficiency is also increased in various areas. This includes energy generation, transportation as well as energy storage and consumption. Learn more about how Infineon makes green energy happen here: "Making green energy happen".

Internet of Things: Infineon's contribution

Throughout the Internet of Things, it is crucial that networked devices are smart, energy-efficient and secure. This is only possible thanks to technologies that semiconductor companies like Infineon are developing or have pioneered. Sensors, for example, form the foundation of IoT by collecting important data from their environment; power semiconductors, conversely, shape data into electronic signals; microcontrollers control complete systems. The connectivity of these systems and IoT devices, as well as their security and protection against malicious access, is also enabled by high-performance semiconductors. Infineon's products and solutions are used worldwide in numerous areas of IoT:

  • In intelligent cities (smart city) professional lighting systems work with LED technologies from our company, among other things.
  • Sensors and microcontrollers are used for smart infrastructure and transportation systems, but also in intelligent homes (smart home).
  • Our wireless network technologies for Wi-Fi and Bluetooth are elementary components for the smart networking of devices and systems (smart connectivity).
  • In Industry 4.0 (smart factory), security chips fulfill the high requirements of industry in addition to special sensors, microcontrollers and power modules. They help protect the systems and devices in the smart factory from attackers.
  • Infineon also equips connected cars (smart cars) with radar sensors, among other things. Our semiconductor technologies are also used in the field of authentication and encrypted data transmission.

Infineon uses innovative materials such as silicon carbide (SiC). These can handle higher loads and voltages while consuming less energy – for greater sustainability. Learn more about Infineon's contribution and the role semiconductors play throughout the Internet of Things: "Unleashing the power of IoT".


Outlook: What does the future of IoT look like?

One thing is certain: The Internet of Things will continue to grow. In the future, connected cars or smart cars will find the fastest and safest routes. Connected streetlights will collect data on traffic, safety, lighting and even air quality as part of a smart city. Connected air cabs will transport people from one place to another in cities. IoT also enables companies to develop new business models, such as pre-built "software as a service" applications, also known as SaaS. The goal is to offer complete IoT solutions for a wide variety of application areas. Likewise, using products remotely as Product-as-a-Service, or PaaS, is becoming more attractive. The central idea: As a company, you rent the use of a device and can use it remotely. The development of the Internet of Things is being driven by various areas:

  1. For example, from the expansion of the new high-speed mobile network 5G: It enables faster and more stable data transmissions. This will be necessary because the more devices communicate with each other, the greater the volume of data. The 5G mobile communications standard can handle this flood and process it in the data cloud.
  2. Edge computing could also become increasingly important in the future: IoT devices will then be able to process data directly on the device on which it is generated. In this way, data analysis in the connected car, for example, can take place even faster than in the cloud.
  3. Artificial intelligence (AI) will also drive the Internet of Things. Computers and algorithms will be able to process problems independently and become better and better at it (machine learning). According to the "Digital Product Development 2025" study by PwC, four out of ten industrial companies are already using data analysis and AI for digital product development. Therefore, the Internet of Things can probably only develop its full potential by linking it with artificial intelligence. It is true that companies are already learning how to improve their products thanks to the analysis of data. But this can be significantly increased if the machines and algorithms can recognize patterns independently.

Would you like to stay up to date on the Internet of Things? Discover and follow our IoT podcast #MakeIoTwork and our IoT Newsroom with more exciting content about the world of Internet of Things at Infineon.

The most important questions and answers on the IoT

The Internet of Things (IoT) unites physical objects with the virtual world. Smart devices and machines are connected to each other and the Internet. They capture information about their direct environment with the aid of sensors, then analyze and link it and make it available in a network. The devices perform certain tasks on the basis of that.

Everyday objects in the smart home, as well as connected vehicles or medical devices that record health data, are part of the Internet of Things. The IoT also includes smart city concepts. Plant and machinery are connected in production and at enterprises; the term used for that is Industry 4.0 or Industrial IoT (IIoT).

The Internet of Things is intended to increase productivity and make our life in general more convenient and efficient. Connected devices and machines automatically capture relevant data from their environment and supply analyses. Users and enterprises thereby obtain new information, save time and cut costs. Devices perform many of the tasks automatically – from turning the heating or lights in the smart home on and off to in-time production of goods in Industry 4.0.

If devices and machines are connected to the Internet, they can also be attacked from the Web. Private users and enterprises therefore have to try and ensure that criminals do not gain control of the devices – for example, to steal data or sabotage plant. The devices also collect an enormous amount of data. It has to be protected when stored. Up to now, however, there are hardly any consistent security standards for IoT devices – or for their compatibility. Sensors are also expected to be more and more powerful, smart and secured – yet consume as little energy as possible.

More and more devices and machines will be connected in the future. 5G, the next generation of mobile communications, and advances in artificial intelligence will give the Internet of Things a further boost. As a result, companies will be able to develop new and improved products; and the everyday life of many users will be more convenient and safer.

Last update: August 2022