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6/22/2010
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China's 'Internet Of Things' Overblown, Says Exec

The interconnected network of everyday objects is a hot topic among government officials, but realization is decades away.

One of China's most prominent chip industry leaders is throwing a bucket of cold water on the Internet of Things, saying the networking concept is a hot topic among government officials, but in reality will take decades to develop.

The Internet of Things is an interconnected network of everyday objects, along with backend systems that seek out patterns of activity among those objects, with the promises of enhancing a range of business and other processes.

"Right now the Internet of Things across the country is heating up mainly in two different directions. On the one hand, it's heating up in the government, with local governments creating Internet of Things projects. On the other hand it's heating up in industry, where companies are taking advantage of a vigorous market to sell sensing devices for big profits," said John Deng, a Chinese Academy of Engineering fellow and founder of Vimicro, one of the first Chinese chip designers to issue an IPO on the NASDAQ.

Some analysts predict that the industrial value of Internet of Things over the next decade will surpass that of the Internet 30 times over, and say it will become a market that is worth more than $100 billion. Deng rolls his eyes at such conjecture.

In an interview with local media, Deng said, "Internet of Things is in the beginning stages, whether you look at it internationally or domestically. It hasn't been standardized or systemized and the practical market applications are very limited."

Deng said that between August and October of last year, more than 30 provinces, autonomous regions, and direct-controlled municipalities began planning Internet of Things projects. The efforts extended to more than 400 Chinese cities.

But he said most of these projects were just a continuation of earlier plans wrapped in Internet of Things packaging. For example, distribution, sensor technology, and industrial automation were all referred to as Internet of Things.

For Deng, building the Internet of Things will be a long process, similar to how the television industry grew from black and white TV sets into an industry that encompasses a wide range of services, such as mobile and interactive TV.

"Internet of Things is a good thing, but Chinese enterprises will have to circumvent many barriers on the road to developing the Internet of Things," he said. "They will have to choose segments of the industrial chain that have high added value for accumulated investment."

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