Hungarians are at the forefront in developing applications for the new Internet of Things, which allows machines to communicate with one another.
Fifth generation talks to machines
While the third and fourth generations of mobile networks – 3G and 4G – were designed for people to connect to the internet, 5G is designed for the industrial internet, wherein machines talk to each other. Mobile broadband will still be important, but 5G will allow wireless connectivity for new uses, including wearables, smart homes, traffic safety, critical infrastructure and industry applications, and very-high-speed media delivery. Machine-to-machine communication can be divided into two main categories: Massive machine-type communication is about connectivity for large numbers of low-cost and low-energy devices in the context of the IoT; Mission-critical machine-type communication requires highly reliable communication to enable real-time control and automation of dynamic processes in various fields, such as industrial process automation and manufacturing, energy distribution, and intelligent transport systems.
Bikers who commute to work or courier service messengers will surely welcome the market launch of Shoka App and Bell, a digital visibility/bell/anti-theft device that comes in the form of a bicycle bell. The Hungarian invention, which combines a fixed element attached to the handlebar and software communicating with it, has different ringtone options for cars and pedestrians and a navigation feature as well. Shoka improves riders’ safety, which can be compromised by other technological advances. “Smart cars are ever more about providing silence and comfort inside, so their drivers are less likely to spot a biker on the road when listening to music,” Daniel Falus, CEO and co-founder of ShokaBell tells the Budapest Business Journal. Using smartphone platforms, ShokaBell can interrupt the music and bring the bike’s ring within the car, Falus said. ShokaBell also alerts bikers if their parked bike is moved (theft alert), and plans routes that avoid places with the most braking and ringing history, as logged previously by the app.
The bicycle bell, production of which is set to start next spring, is a good example of the Internet of Things (IoT). Smart and communicating: That is the essence of the IoT, which seeks to connect physical products that transmit data to a “brain” that processes and uses the information smartly. It seems no sector will remain unaffected: Healthcare, education, business services, transport; all are seeing developments. According to a recent European Commission study, the market value of the IoT in the EU is expected to exceed €1 trillion in 2020. It is not yet clear how much of that market belongs to Hungarians, but this country has some advantages for those working in the field. The ICT Association of Hungary (IVSZ) has just launched a survey to gauge the relevance of the IoT here.
The number of enthusiasts is high. The first professional forum, IoTPedia meetup in Budapest last May drew between 80-90 attendees. “Since then LogMeIn, Magyar Telekom, GE, SAP, and Cisco have taken an active role in building the community,” says Balázs Szabó, organizer, cofounder and CEO of IoT Labs Ltd. The company has developed Smartdrive.io, a plug-and-play car-fleet management solution. IoT Labs secured nearly €400,000 in investment funds and is about to launch the product on the German market.
Safety and navigation solutions are popular among Hungarian companies involved in the IoT. Car navigation system producer NNG earlier announced it would start working on connected car features. SmartVineyard, a vineyard monitoring system by Quantislabs Ltd. can prevent theft and damage beyond its main feature of collecting and synthesizing weather data for healthier grapes. Velotrack, an anti-theft and sports tracking device for bicycles, not only notifies the owner if a bike is being stolen, with its GPS it helps track and find it.
Those investing in IoT early on are entering a field with huge potential, Péter Vityi, vice president of IVSZ tells the BBJ. Since the threshold is fairly low – it requires a non-IT expert who spots a niche need and an IT professional – startups have more room to maneuver, Vityi says. “IoT doesn’t have to concentrate as much as mobile developments did, which were dependent on star manufacturers such as Apple or Samsung.”
Csaba Antal, head of business development at Pear Williams Kft., the company behind Velotrack, agrees. “The market is at a very early stage in every part of the world, large companies have just started to build platforms,” he says, explaining that this means Hungary has an equal chance to compete.
Yet, in order to become global players, Hungarian firms will need to overcome a shortage of experts and capital. There are around 2,500 engineering graduates per year in Hungary, but the domestic market has enough demand for another 4,000-5,000 more. As for capital, Szabó says: “Prototypes may be brought to life with an open-source platform easily, but developments require heavy investments. The Hungarian ecosystem at the small enterprise level is not prepared for that.”
Pear Williams’ Antal disagrees, however, maintaining that there is plenty of capital available. “As long as a product can generate real demand, its creators will be able to find investors who finance it,” he says. His company received HUF 98 million in capital from Széchenyi Tőkealap-Kezelő Zrt. in February, and also received several business offers as one of the nine Hungarian startups featured at the Tel Aviv DLD Expo this September. Unlike ShokaBell, Velotrack sells to businesses, as its machine-to-machine tracking device is built into the bike during the manufacturing process. “In Israel, we talked with electric bicycle firms, as these are much more expensive, and therefore require more security,” he says, adding that production will begin this month.
Some of the more interesting progress in IoT is taking place in the automotive industry, as cars are being made to communicate with signposts and each other. That Hungary is an auto-making hub comes in handy for budding IoT startups, which can cooperate. Shoka, for example, gets essential technology from a Hungarian car parts supplier.
The use of a 5G will be inevitable for the segment to progress, and for this Hungarian companies are also well positioned. Ericsson, a global communication technology and service provider, is carrying out 5G R&D activity in Budapest. The Swedish-based telecom recently announced the opening of the Ericsson Garage at its R&D facility in Budapest, a technology incubation lab, working with radical innovations connected to cloud computing, virtualization, 5G, IoT, and analytics.